Close working in the supply chain key to demand planning

25 August 2011

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25 August 2011 | Adam Leach

Working more closely with suppliers and customers on demand planning is key to an effective supply chain, according to a report.

Achievingexcellence in production and supply, published this week by PwC, said the quality of a supply chain is heavily dictated by how closely buyers, suppliers and customers work together.

The report suggested companies should take a step back from a ‘just in time’ approach and engage in more demand planning. Highlighting the need for preparation, the study said that when scarce commodities are involved, there is a fine line between ‘just in time’ and ‘just not there’.

It claimed that while buyers and customers are good at specifying what they want, there is a lack of detail on the reason why they want these requirements. If suppliers understood the context of company strategies, such as customer promotions, vendors would be able to manage demand more effectively.

The report also cited four other areas that companies need to work on with their supply chain partners. These are; identifying and mitigating supply chain risk, building deep relationships with vendors to encourage collaboration, addressing lifecycle opportunities of products and demonstrating sustainable value, and attracting the people and developing the skills necessary for the future.

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