It’s not sufficient today to insure your company’s part of perfect order performance. The notion of a demand-driven supply chain is based on changing a manufacturer’s view of its own business processes, as well as tightening their relationships with fulfillment partners, in an effort to provide more flexible and responsive product deliveries, and a new level of customer service. This involves aligning business processes to manage demand and supply activities, both within and beyond the four walls of manufacturing – outside the traditional concepts of one’s own “enterprise.” This can result in an expanded ability to relate to your customers – and to your customer’s customers – in a whole new way.
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Explore this issueJune/July 2006
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Moving from forecasting and planning, to effective execution and order fulfillment through all levels of your food and beverage supply chain, requires timely customer response while managing continuous and unexpected changes in both actual demand and supply processing.
Given the added levels of complexity with a demand-driven business approach, to delivering consistent product quality on time, for the right price, based on both customer and internal targets – food and beverage manufacturers must provide operational management, visibility and control, due to nature’s less-than predictable ingredients as part of supply chain fulfillment business processes. This includes adhering to both government and customer-based regulatory controls while handling, processing, and moving raw ingredients, intermediates and finished products.
To improve your overall supply chain’s ability to sense and respond to demand and supply variability during order fulfillment, it’s key to have an accurate actual demand/supply picture, when promising customers delivery against new or existing sales orders. Perfect order responsiveness by manufacturers who adopt a demand-driven business model in their supply chain offers a distinct competitive advantage in the food and beverage marketplace.
Ironically, strategic planning and agility during order fulfillment doesn’t always find an easy coexistence in organizations today. Manufacturers who excel at strategic planning are often challenged to spot and pursue new opportunities, while those who excel at managing day-to-day operations rarely find time to plan strategically. In order to excel within a demand-driven supply chain, incorporating excellence in both ends of the planning and execution spectrum is a must. This includes organizational alignment to understand and respond to constantly changing demand-driven requirements, in order to achieve optimum results. A demand-driven supply chain is based on a generic key message – focus on demand. This places pressure differently across each industry segment, even by individual Standard Industry Codes in the food and beverage sector.
Product and Services Innovation
Food and beverage products often have short product life cycles, which demand rapid and innovative New Product Development (NDP) programs. Being able to efficiently and seamlessly manage new product introductions, lifecycles for ongoing products, and related value-add services offerings within both retail and institutional food service marketplaces can be a major demand-driven business differentiator. Today, both private label and branded product manufacturers are evaluating and bringing new products, containers, and multiple package sizes to market rapidly, and with great frequency.
In retail markets, this often includes promotional labeling, giveaways, and aisle and end displays, often based around seasonal events. Promotional packaging initiatives strive to gain shelf space, customer favor, and ultimately, increased market share. This means food and beverage manufacturers, and contract outsource manufacturers, must manage product formulas by individual plant and line. Each product may also include complex pack size and label combinations – all requiring formula level control (i.e. date-sensitive versions by manufacturing location). Manufacturers have also recently seen growth in “store brand private label” products, increasing the need for close collaboration between manufacturers and their end customers, to improve NPD processes. Synchronizing new product programs based on production, distribution, and sales requirements is key to insuring the right promotional packaged products are delivered to the correct customer, at the right time.