Roundtable: Becoming Demand-driven

Given today’s volatile and ever-changing environment, the gap between the necessary and the actual Supply Chain competencies is rapidly increasing for a large majority of companies. Therefore, many companies fail to deliver the right value to their customers and incur a lot of additional yet avoidable costs to keep their promises towards customers and other stakeholders. In order to remain competitive, companies should develop into demand-driven organizations (DDOs).  

Andrea Walbert, Managing Partner, PMI Production Management Institute GmbH

“Over the last twenty years business conditions and customer expectations have changed with such an increasing speed that education providers are under pressure to support the growing need for the right competencies to keep pace with those changes. The biggest challenge in empowering the workforce is the combined use of change and business process management tools to support the necessary transformation of the entire value chain of a company. Companies not only have to become demand driven but also adaptive: adapt or die.”

Michael Zerby, Head of Supply Chain, Volvo Construction Equipment Konz

“I agree. The unnecessary costs are often called ‘enabling costs’; they could be avoided through more intelligent planning and effective implementation in the supply chains.”

Andreas Schön, System & Service Manager Europe, Nexans

“Absolutely right! Creating actions and solutions around customers is key in order to better understand and fine-tune a company’s offering, provide added value and even transform existing business models into future new revenue possibilities.”

Thomas Meyer, Head of Supply Chain, Sonae Arauco

“Before changing into a demand-driven organization, a company should first understand how it makes money. It is of course necessary to be focused on customer needs, but in some businesses the money is generated by manufacturing processes. Changing the organization without having a clear understanding of the value for the customer and for the company could create a lot of inefficiencies.”

Andreas Schöchtel, Manager Operations Laboratory Products, Thermo Fisher Scientific

“I believe each organization is demand driven nowadays, but some do it better than others and thus have a competitive edge. It is more difficult to apply demand-driven practices in a 100 percent project-based business than in manufacturing, for example. In other words, each DDO has its own market and operations/business and commercial strategy.”

Stefan Zabka, Supply Chain Manager, IMA Dairy & Food Holding

“It is most important to get the right information into the supply chain in order to deliver the right value to the customer, and the demand-driven operating model provides exactly this framework. It is also important to define a set of rules to give organizational stability.”

Daniel Schmidt, executive MBA student, Kühne Logistics University

“Today, meeting the financial targets is the number-one priority to keep the business running. Companies are increasingly splitting up into several legal entities across countries to improve financial performance, e.g. through intercompany transfer pricing and different tax rates. But these financially driven measures do not support cross-functional process-based thinking and alignment and can hardly lead to a well-managed supply chain.”

Creating supply chain awareness at senior management levels and across all relevant disciplines is still neglected within many companies, leaving supply chain education an isolated initiative within Supply Chain alone. In order to become a DDO and to create the cross-functional alignment required for supply chain success, other business departments should also be trained in supply chain trade-offs.

Andrea Walbert, Managing Partner, PMI Production Management Institute GmbH

“We see a major edge for companies with senior-level commitment for supply chain across all functions. Wherever supply chain is seen as an order winner by top management, supply chain processes are much more mature, and end-to-end alignment and collaboration is the norm. These companies typically invest in demand-driven education across all functions rather than for Supply Chain only.”

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This article was first published in Supply Chain Movement 29 | Q2 – 2018