Demand-Driven Supply Chain Network Collaboration

Achieve competitive advantage by applying Driven-Driven principles across the extended collaborative supply chain

After a company has successfully transformed itself into a Demand-Driven Adaptive Enterprise, the next step is to identify key customers and suppliers with whom the application of Demand-Driven principles for inter-company planning and replenishment would generate still further significant efficiencies.

Reducing costs through collaborative working in the supply chain

In essence, by sharing visibility of on-hand and on-order inventory status against agreed targets (using Demand-Driven ‘software as a service’ systems) the trading partners are able to better synchronize supply with end customer demand and, thereby, reduce aggregate inventories, improve throughput capacity utilization, reduce stock outs and eliminate the costs of fire-fighting and expedited deliveries. Of course, agreement on management of exceptional demand and supply events is required as well as alignment on how to trigger replenishment orders and the maintenance of inventory targets – but these can be quickly established when both parties understand the full benefits of this new way of working.

Improve flow across the extended supply chain

In the past, attempts to launch collaboration of this nature have usually failed because a forecast driven replenishment process, such as CPFR, has been used. But the inevitable forecast inaccuracy led to service issues, lack of trust and eventual failure. Demand-Driven Supply Network Collaboration overcomes this problem and can lead to significant competitive advantage for those companies fortunate enough to be a partner in such an extended supply chain.