The Powerful Potential of Demand Management

This is an excerpt of the original article. It was written for the May-June 2011 edition of Supply Chain Management Review. The full article is available to current subscribers.

May-June 2011

People, process, technology. These are the three core elements that determine the relative success (or failure) of any organization. We’ve heard this in countless management books and keynotes speeches. And it’s hammered home in business school curricula across the country. Now it’s our turn. This issue of Supply Chain Management Review is devoted in roughly equal measures to the three core elements. Our rational: Their importance can never be stated enough.

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How well does your organization do at demand management, and in particular demand forecasting? The answer to this question is central to supply chain and business success. Proficiency in demand management is absolutely critical in developing the right relationships with suppliers, producing the right amount of product at the right time, and forging a mutually beneficial and profitable relationship with customers. For this article and related survey, we see demand management as the process of assessing customer demand and matching that demand with the supply chain capability to deliver against it in a cost effective manner. For the most part, we exclude demand management processes focused on influencing demand.

Griffin Strategic Advisors recently conducted a survey among supply chain professionals to determine the challenges and success they have experienced with demand management activities. (For more details on the survey, see accompanying sidebar.) Based on the respondents’ collective experiences, we hoped to identify the state of demand management today, the recurring challenges that need to be overcome, and the best practices. From the findings, we also developed what we hope are useful insights for taking demand management activities to a higher level. Importantly, in developing the survey we sought the input of the supply chain professionals themselves. The idea was to ensure that we had a “real-world” orientation.

Our survey focused on these key areas of inquiry: (1) most important demand-management challenges facing companies; (2) demand management integration with other related business systems; (3) best practices in demand management; and (4) key issues around demand forecast accuracy. We discuss each in turn.

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