Increased levels of SCM headcount efficiency and functional centralization
Improved planning efficiency
As companies seek competitive advantage, adoption of centralized organizational structures have become the norm across many business functions (e.g. Finance, HR) as a means to reduce costs. Similar improvements have also been sought in SCM but results have been disappointing: While centralization of demand and distribution planning has occurred with varying levels of success, all too frequently the supply planning activity is disconnected and factory centered. A key reason is the widespread continued use of the ineffective SCM execution process “forecast push MPS/MRP”.
Improving headcount efficiency
With the adoption of Demand-Driven SCM it becomes possible to strive for a larger degree of regionalization or centralization and significantly increasing SCM headcount efficiency.
E2E supply chain perspective
Distinguishing between the two key activities “Planning” and “Execution”, the “Execution” part becomes almost autonomous within DDSCM. Thus, the Supply Chain Planner role switches from an expediting focus to real planning and event management. With technology advancements enabling an end-to-end value chain view and providing visibility across the entire value chain it now becomes possible to better integrate the “real” supply chain planning activities.
Furthermore: As decisions like decoupling point placement and buffer sizing should be made considering the entire supply chain network, the centralized end-to-end focus of demand-driven planning becomes essential.