Joerg Koesters
Director Consumer Products Industry Solution Marketing SAP AG
COLLABORATIVE DEMAND AND SUPPLY PLANNING SHOULD BE A PRIORITY FOR ALL COMPANIES IN 2009. Why? As leading CP companies including Procter & Gamble, ConAgra, Colgate-Palmolive, Kimberly-Clark and Brown-Foreman are demonstrating, it can produce great immediate value.
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Seize revenue opportunities, eliminate stock outs, and provide a better shopper experience by gaining visibility into customer and consumer demand;
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Improve in-stock rates and service levels, optimize network inventories, and reduce supply chain costs by responding quickly and profitably across the supply network;
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Profitably meet customer expectations and be a better partner for growth by out-executing their competition and balancing demand and supply.
Accordingly, companies that have not developed their collaborative demand and supply planning capabilities need to begin now. Why? Today, growing the business while satisfying consumer demand is getting progressively more challenging. The supply chain itself continues to evolve from relatively simple and linear to today’s ever-more-complex global network. Companies are serving more retail customers and consumers in more markets everywhere.
This overall complexity escalates supply chain volatility and risk. Further, in today’s unprecedented economic environment, rapidly changing input costs and shrinking margins are sources of continuous pressure to react appropriately. To succeed –– even to survive –– companies need to be able to take advantage of commodity price decreases and protect against increases, minimize inventory, and reduce expenses throughout the supply chain.
And because the trade customer is under equal pressure, as well as that of creating an appealing and competitive shopping environment, retailers are, more and more, differentiating the CP company from competing suppliers on superior customer service. Today, a CP company’s brand popularity and product quality are merely table stakes; supply chain excellence is what separates the preferred supplier from the rest. Indeed, to enable CP suppliers to help them build consumer traffic, sales and profitability, retailers are more willing than ever to share data, not only in North America but in Europe and Asia –– but in return, they expect nothing less than 100-percent customer service.
Yet as we all know, forecasting, the traditional gauge of market demand often considered both science and art, almost never predicts demand as accurately as needed to optimize supply and service levels.
Cecere, Lora, et al., The Handbook for Becoming Demand Driven, AMR Research, July 2005.
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