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go through Larry Rapid ·
March 4, 2024
The topic of this column was originally discussed in my November 2013 Insights column. “Demand shaping with supply considerations” involves activities primarily the responsibility of marketing and sales management. However, while supply planning managers are not responsible for demand shaping per se, they should play two (not just one) important roles. The first, of course, is ensuring supplies are in place to meet all expected future unrestricted demand. The second issue that is often overlooked is that whenever there is a serious supply shortage, “supply-oriented, demand adjustment” is advocated. This role involves better aligning demand with potential on-hand, order and procurable supply. Mainly aimed at improving profitability, revenue and asset utilization. Rather than blindly matching supply and demand.
Pull supply chain and push supply chain
In my first presentation at a supply chain conference in 1998, I discussed the concept of manufacturing “push” supply chains versus consumer “pull” supply chains. Historically, manufacturing organizations have long pushed finished products to sales and marketing organizations for sale. Too often no consideration is given to what consumers may actually need. At that time, I often said this: the supply chain is shifting from “selling products you produce to selling products people expect to sell.” Before the sales and operations planning (S&OP) process was adopted in the mid-1980s, manufacturing planners had little faith in sales plans or forecasts. S&OP uses independently benchmarked, unconstrained demand forecasts to initiate the S&OP process, creating a trend from push to pull supply chains—later called demand-driven supply chains.
Future supply will require both push and pull
go through Larry Rapid ·
March 4, 2024
The topic of this column was originally discussed in my November 2013 Insights column. “Demand shaping with supply considerations” involves activities primarily the responsibility of marketing and sales management. However, while supply planning managers are not responsible for demand shaping per se, they should play two (not just one) important roles. The first, of course, is ensuring supplies are in place to meet all expected future unrestricted demand. The second issue that is often overlooked is that whenever there is a serious supply shortage, “supply-oriented, demand adjustment” is advocated. This role involves better aligning demand with potential on-hand, order and procurable supply. Mainly aimed at improving profitability, revenue and asset utilization. Rather than blindly matching supply and demand.
Pull supply chain and push supply chain
In my first presentation at a supply chain conference in 1998, I discussed the concept of manufacturing “push” supply chains versus consumer “pull” supply chains. Historically, manufacturing organizations have long pushed finished products to sales and marketing organizations for sale. Too often no consideration is given to what consumers may actually need. At that time, I often said this: the supply chain is shifting from “selling products you produce to selling products people expect to sell.” Before the sales and operations planning (S&OP) process was adopted in the mid-1980s, manufacturing planners had little faith in sales plans or forecasts. S&OP uses independently benchmarked, unconstrained demand forecasts to initiate the S&OP process, creating a trend from push to pull supply chains—later called demand-driven supply chains.
Future supply will require both push and pull
March 4, 2024
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Article topic
Requirements Planning·
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