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Supply Chain Strategy for Industrial Manufacturers: The Handbook for Becoming Demand Driven

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The recession was a wake-up call for industrial manufacturers, with no more double-digit growth to hide the sins of complexity, long cycle times or high inventories. Throughout 2009, industrial manufacturers focused on freeing up cash. The leaders now emerging from the downturn have redesigned their supply chains to ensure sustainable performance. But will they be the demand-driven leaders of the future?

 Key Findings

■ The 2009 recession shifted the primary focus from "customer is king" to "cash is king." Industrial supply chain leaders made good use of the crisis to implement changes not easily done in a stronger economy.

■ Industrial leaders that excelled balanced technological innovation and operational excellence. The best in class addressed diverse markets, which required best-practice performance management and supplier management, including providing longer-term, unconstrained demand signals to their supply networks.
■ Achieving demand-driven excellence requires a fundamental shift in mind-set and a commitment to overcome the challenges of change to achieve success.

■ Prolonged high unemployment along with government intervention, stimulus and budget issues affected traditional demand patterns, which resulted in industrials adjusting capacity, inventory and internal cost organizational structures.

■ The concept of demand management is murky. Combining multiple, complex demand signals into a visible demand landscape is challenging.

 

Recommendations

Identify the portfolio of key initiatives that will help transform your traditional supply chain into a demand-driven value network (DDVN).
■ Recognize that becoming demand driven is a change management journey, not a project. It requires clarity of vision and goals as well as a definition of what represents "good": transitioning from constrained, short time horizon demand signals to unconstrained, longer time horizon demand signals conveyed to all supply network stakeholders.

■ Build capabilities for nimble translation of demand into a profitable supply response based on customer commitments, supply constraints (e.g., parts shortages and extended lead times) and conscious best-value trade-offs.
■ Orchestrate the demand-driven response by designing differentiated supply chains based on segmentation of the demand, supply and product cycles.
■ Invest in collaboration with key partners to create joint value. Enable processes that engage OEM product innovation and supplier innovation teams, resulting in products aligned with demand.

Download the full white paper below.

Last modified on Wednesday, 26 September 2012 09:11

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