Demand Driven Supply Chain

Consumer goods manufacturers are slowly moving in the direction of Demand Sensing and Customer Responsiveness. At the same time, they need to provide real-time profitable answers to dynamic consumer demand in relation to their supply chains. And this means the rising expectations of all participants need to be fulfilled in online and offline business, both of which are starting to merge.

This, in turn, requires an intelligent linking of knowledge about the customer with the findings from the supply chain. Only in this way will consumer goods manufacturers be able to reduce their lead times and product introduction times significantly. At the end of the day, it’s all about transforming the previous, linear supply chains into customer-oriented demand networks, which is no small task.

In doing so, demand information is retrieved using a continuous stream of new signals from a wide variety of sources. Sources such as trade partners, wholesalers, shopping websites (e.g. Amazon), consumers themselves or even the Internet of Things (IoT).

Only after orchestrating a network of internal and external partners will it be possible fulfil demand precisely and as requested.

WITH SUCH AN UNDERSTANDING, CONSUMER GOODS MANUFACTURERS CAN START FINDING ANSWERS TO RELEVANT QUESTIONS SUCH AS:

• What is my short-, medium-, and long-term view of the expected demand across all sales channels?
• How can I combine my supply chain planning with strategic, financial, operational, and operative goals?
• How can I improve my planning? Through more intensive internal exchange, or possibly also external exchange in cooperation with my customers, partners, and suppliers?
• How can my company translate the planning into feasible goals for the executing systems?

By tackling these issues in a holistic manner, it is possible to implement production processes in a more demand-based manner than before. Optimised capacities and just-in-time production help to ensure the availability of goods while reducing storage costs. A ‘real-time’ demand driven supply chain can help companies to impress their customers on an ongoing basis and establish and expand customer relationships in a sustainable and profitable manner.

Based on our many years of expertise in professional process consulting and system integration in the consumer goods industry, we can bring you one important step closer to this. We utilise the latest SAP technologies, such as S/4 HANA and IBP (Integrated Business Planning), and can help you to align your core processes with the growing requirements.

WHAT DOES THAT MEAN FOR ME SPECIFICALLY IN EXAMPLES?

• The transformation of manual, and often Excel-based collections of information from various sources into linked, standardised, and automated processes. The time needed for planning meetings in your business units or possibly your entire organisation will be reduced substantially.
• The development of a joint platform with an intuitive user interface. This will help you to better manage your business planning and optimise the cooperation within your functional teams as well as with suppliers, partners and, customers.
• The creation of ‘what-would-happen-if’ analyses, scenarios and planning simulations in real-time, which enable your teams to reach agreements more quickly during business planning meetings.
• The creation of accurate forecast processes and the production of more precise forecast figures.
• The production of performance indicators, warnings, and the use of advanced analytics. You will therefore be able to make relevant decisions more quickly.

On the basis of this, some companies that have implemented these changes have already been able to significantly improve important key figures of their business, such as*:

• Reduction of stock write-offs from around 0.29% of turnover to 0.25%, which equates to a 14% reduction
• Reduction in lost revenue due to out-of stock items from around 1.0% of the turnover to 0.8%, which equates to a reduction of 10%
• Increase in the timeliness of deliveries from 86.3% of all deliveries to 90.9%, which represents an increase of nearly 5 percentage points
• Increase in forecast precision from around 76.8% to 83.8%, which represents an increase of nearly 8 percentage points
• Improvement in lead times for executing orders from 6.2 days to 4.1 days, which equates to an improvement of 35%

**Source: 2017 SAP SE or an affiliate company

These examples make it clear that a meeting with us could definitely be worthwhile for you. Don’t hesitate to . Get some advice and find out how we can support you with our industry know-how, technical expertise, structured approach, and reliable implementation. Numerous renowned companies from the consumer goods industry have been placing their trust in us for many years now.