No One-size-fits-all Planning Process Seen for Demand-Driven Supply Chains

Faster innovation and technology development, ubiquitous information challenging traditional planning techniques, Manufacturing Insights says

Faster innovation and technology development, ubiquitous information challenging traditional planning techniques, Manufacturing Insights says

Framingham, MA  November 21, 2005  Aligning supply chain processes to actual demand is difficult to achieve under the traditional constructs of supply chain planning, and there is no one-size-fits-all solution for companies looking to become "demand driven," according to a new study from research and advisory services firm Manufacturing Insights.

In the study, which provides guidance on how to align and balance supply with customer demand even as the dimensions of the supply chain scope become more complex, Manufacturing Insights asserts that today's faster pace of business innovation and technology development, coupled with the ubiquitous availability of information, is challenging the effectiveness of traditional planning techniques.

"Highly complex, more globally-oriented supply, product margin and fulfillment requirements present unique challenges to manufacturing companies, regardless of size," said Bob Ferrari, director of supply chain strategies and author of the report. "In the most complex of these scenarios, no one-size model of planning will be able to accommodate the needs for both agility and effectiveness across fulfillment processes."

The study, Aligning Supply With Demand - New Paradigms for Supply Chain Planning, includes a discussion of current supply chain planning challenges for many manufacturing companies in the context of a much broader approach, a concept referred to by Ferrari as "supply chain economics." Instead of traditional forecast-based planning, the focus is rapidly shifting toward pull-oriented planning, where customer demand for products and services triggers local planning and execution activity that is more dependent on the external supply network.

"Manufacturing companies have long desired to implement more demand-driven planning and execution, and today's newer technologies, coupled with better organizational learning, put this goal within reach," said Ferrari. "But for many manufacturing sectors, there are several challenges to address in planning process design, organizational alignment and leveraged use of technology."

The study is available from Manufacturing Insights' Web site.

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