Making Demand Management a Reality in Procurement

Change management is critical to realizing the full potential value of any initiative that seeks to change the way end users procure goods and services


By Derrick Moreira

Most supply management organizations recognize the value of demand management in theory as a key lever for driving efficiency and reducing total costs. But they also know that realizing the value of demand management in reality is hard work. It requires patience and a willingness on the part of internal customers to change.

Too often, demand management strategies falter or fail — or are never pursued to begin with — even though the payoff can be substantial. Companies can reduce spend by 10-20 percent through demand management. But realizing those savings can be daunting indeed.

What is Demand Management?

Simply speaking, demand management is a key lever in the procurement process for reducing costs by managing requirements, controlling demand (e.g., policy that limits who can receive a desktop printer), and distinguishing between "wants" and "needs."







1. Zero in on demand management opportunities.





2. Identify the stakeholders — all of them — and their concerns regarding the changes.



3. Communicate with stakeholders to get "buy in" from the beginning.



4. Adapt policies and processes to realize demand-driven efficiencies.

5. Instill demand management in the culture so it becomes self-sustaining and automatic over time.







About the Author www.censeoconsulting.com


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