Competitive Supply Chains: Optimized Demand Management

This is an excerpt of the original article. It was written for the December 2015 edition of Supply Chain Management Review. The full article is available to current subscribers.

December 2015

It’s December, and time once again for our annual Executive Guide to Supply Chain Resources. This is a comprehensive guide to services, products, and educational opportunities targeted specifically to supply chain professionals. The editors at Supply Chain Management Review wish all of our readers a successful year to come.

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Author’s note: This is the third in a series of columns on competitive supply chains. The first, “Supply Chains: Excellence,” appeared in the July/August 2015 issue. It defined an excellent supply chain as one that plays a major role in competing and identified the four salient requisite characteristics of excellent supply chains. The second, “Competitive Supply Chains: Strategic Alignment,” appeared in the September/October 2015 issue. It offered a planning process for aligning a supply chain to enable competitiveness. This third and final column in the series looks at the need to implement Demand Management (DM) processes that formally enable supply- and demand-side managers to collaborate over time. Without formal, routine joint decision-making processes, a supply chain organization is not really playing a major role in executing a corporate strategy, even if it is strategically aligned. - Larry Lapide

I have often researched, spoken, and written about the Sales and Operation Planning (S&OP) process, especially addressing supply chain manager issues. Speaking before supply chain audiences, I point out that this “matching of supply and demand” planning process has been a major focus of mine because, before joining the supply chain community, I started my career on the “dark side.” Many in the audience smile when I ask: What do I mean by that?

My Demand-Supply Perspective
Most assume that I came from sales. Actually, for the first 15 years of my career I was in marketing. I point out that too many in the audience don’t really know or care about the difference between the marketing and sales functions because “all those managers complicate things for supply chain folks, making our jobs harder!” However, there is a difference. A sales rep is responsible for selling the products a company has today, while a marketing manager focuses on promoting products and ensuring that a company has products to sell in the future. Thus, marketing is a strategic function. In the S&OP process, sales offers valuable input about short-term revenues, while marketing is more knowledgeable about the long-term.

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