So costs have been reduced – the workforce trimmed, product ranges rationalized, supplier squeezed, investments frozen – what next? Well assuming that things are going to get better, where are we going to see process improvements in the future? One area that will get a great deal of attention will be the whole process of demand management. In our latest survey of manufacturers across the region, the whole area of demand management is gaining in interest. This is borne out by the discussions I have been having with companies where there seems to have been a horrible realization that the current demand planning process is basically not upto the job! As the demand for goods ‘fell of a cliff’ at the end of last year, many companies did not actually realize that the end customers were not actually buying, and it was only when the warehouse was full did the real facts hit home, that demand had plummeted.
Form Manufacturing Insights survey work there is a definite move by companies in the region to move towards using real time information - from the point of sale or point of consumption and passing that information back through the supply chain. Real time information has different connotations for different industries – it all depends on the ‘clockspeed’ of that industry. For example, aircraft manufacturers or shipbuilders operate in time cycles of months and years compared to consumer electronic firms who operates in days and weeks. Companies will need to determine what 'clockspeed' they operate at, and what makes sense in terms of real-time demand information. There is then the thorny issue about how to transfer that information back from the point of sale to the manufacturer.
Improving the demand management process is a great way to start getting closer to your customers and to also improve the information flow through the entire demand and supply chain.