Supply Chain Exam
Q1a. What is Demand Chain Challenges ?
At present, there appear to be four main challenges to progress in transforming Demand Chains and making them faster, leaner and better:
Linking Demand and Supply Chains
Demand Chain Information Systems
Demand Chain Process Re-Engineering\
Demand chain budget segmentation, targeting and optimization
Linking demand and supply chains
The core problem from the supply chain perspective is getting good demand plans and forecasts from the people driving demand: marketing, sales promotions, new product developments etc. The aim is to minimize out-of-stock (OOS) situations and excessive cost of supply due to spiky demand. Much attention has been drawn to the bullwhip effect. This occurs when demand patterns are extremely volatile, usually as a result of sales promotions, and it has the unintended consequences of driving up supply chain costs and service issues, due to supply capacity being unable to meet the spiky demand pattern and the entire chain becoming unstable as a consequence.
Demand chain information systems
Information about activities and costs is an essential resource for improving value chain performance. Such information is nowadays readily available for the supply chain, due to the widespread implementation of ERP technology (systems such as SAP), and these systems have been instrumental in the transformation of supply chain performance.
Demand chain process improvement
Processes in the demand chain are often less well-organized and disciplined than their supply side equivalents. This arises partly from the absence of an agreed framework for analyzing the demand chain process.
Demand chain budget segmentation, targeting and optimization
Demand chain budgets for marketing, sales and service expenditure are substantial. Maximizing their impact on shareholder value has become an important financial goal for decision makers. Developing a shared language across marketing and finance is one the challenges to achieving this
At present, there appear to be four main challenges to progress in transforming Demand Chains and making them faster, leaner and better:
Linking Demand and Supply Chains
Demand Chain Information Systems
Demand Chain Process Re-Engineering\
Demand chain budget segmentation, targeting and optimization
Linking demand and supply chains
The core problem from the supply chain perspective is getting good demand plans and forecasts from the people driving demand: marketing, sales promotions, new product developments etc. The aim is to minimize out-of-stock (OOS) situations and excessive cost of supply due to spiky demand. Much attention has been drawn to the bullwhip effect. This occurs when demand patterns are extremely volatile, usually as a result of sales promotions, and it has the unintended consequences of driving up supply chain costs and service issues, due to supply capacity being unable to meet the spiky demand pattern and the entire chain becoming unstable as a consequence.
Demand chain information systems
Information about activities and costs is an essential resource for improving value chain performance. Such information is nowadays readily available for the supply chain, due to the widespread implementation of ERP technology (systems such as SAP), and these systems have been instrumental in the transformation of supply chain performance.
Demand chain process improvement
Processes in the demand chain are often less well-organized and disciplined than their supply side equivalents. This arises partly from the absence of an agreed framework for analyzing the demand chain process.
Demand chain budget segmentation, targeting and optimization
Demand chain budgets for marketing, sales and service expenditure are substantial. Maximizing their impact on shareholder value has become an important financial goal for decision makers. Developing a shared language across marketing and finance is one the challenges to achieving this