Take Control of your Supply Chain with this Powerful Practice

Sometimes inventory can be allocated and shipped in the blink of an eye. This is fantastic and the warehouse gets kudos for being so efficient. However, what if that shipment will cause a stockout for an "A" item, and the next delivery is not anticipated for 2 months. Even worse, what if the customer that took the remaining inventory was a "C" customer, and the next day a strategic customer places an order for the same item?

Those of you that have not been in supply chain very long might think that will never happen. But, I bet the more seasoned supply chain leader will nod their head and recognize that Murphy is hiding around every corner.

What if there was a simple process for bringing all this under control. Well you are in luck. The process is Demand Control and it is explained below:

What is it?

Demand control refers to a set of strategies and practices used to manage and regulate customer demand for products.

What is the goal?

To ensure that the supply chain can efficiently meet customer demand while minimizing disruptions, costs, and risks. In other words, it takes chaos out of the near-term planning process and stimulates timely actions.

When is it necessary?

When demand is greater than supply over the near term, or conversely, when actual orders are less than the demand plan over the near term.

What is the Process?

Establish the role of a Demand Controller within the company. Monitor orders (daily or weekly, as appropriate) versus the near-term plan and engage the appropriate sales leadership when demand varies from plan.

What are the business benefits?

• Contributes to increased sales revenue.
• Quicker and proactive response to potential demand/supply imbalances, rather than waiting for an urgent situation, such as a customer order, to attempt to align supply with demand.
• Studies show that inventory reductions of as much as 25 percent and customer service improvement of a point or two will be reflected in a positive growth in revenue, operational, and other related parameters.

What is the relationship between Demand Control to S&OP?

Demand Control will improve supply chain performance in the near-term, which will enable company’s executive leaders to truly concentrate on the future — four months and beyond — through the S&OP process

The concept of Demand Control is covered in my book, Lean Forecasting Demystified, which is available for preorder on Amazon today:

If you have time, please click here to learn more about BioSupply Consulting.

If you'd like to contact Steve directly, please drop me a line at: [email protected]

Thank you!