demand mgmt and customer service

8/12/2019 Demand Mgmt and Customer Service

1/28

DEMAND MANAGEMENT

AND CUSTOMER

SERVICE

1


2/28

Demand Management

Defined as focused efforts to estimate and

manage customers demand, with the intention

of using this information to shape operating

decisions. Recent practice has been just the opposite, with

the manufacturer determining the what, where,

when, and how many of the sale.


3/28

Demand Management

It is this disconnect between manufacturing and

the demand at the point of consumption that

attracts attention to demand management.

Any attention paid to demand management will

likely result in benefits flowing through the

supply chain.


4/28

Demand Management

Demand management takes supply chain management

to the next level by enabling an automated ecosystem

that simultaneously maps demand forecasting against

factors like supply restrictions, customer commitments,inventory counts, financial predictions, as well as

patterns of behavior that can affect demand at any given

time.

Demand management is a more proactive approach

than its predecessors relying on highly sophisticated

quantitative analytics and advanced modeling

techniques to preset tolerance levels, predict and

pinpoint problem areas, monitor and adjust strategies

dynamically, and achieve real-time visibility and synergy


5/28

Demand Management Objectives

Gathering and analyzing knowledge about

consumers, their problems, and their unmet

needs.

Identifying partners to perform the functionsneeded in the demand chain.

Moving the functions that need to be done to the

channel member that can perform them most

effectively and efficiently.


6/28

Demand Management Objectives

Sharing with other supply chain membersknowledge about consumers and customers,available technology, and logistics challengesand opportunities.

Developing products and services that solvecustomersproblems.

Developing and executing the best logistics,

transportation, and distribution methods todeliver products and services to consumers inthe desired format.


7/28

Demand Forecast ing

A major component of demand management is

forecasting the amount of product that will be

purchased by consumers or end users.

In the integrated supply chain all other demandwill be derived from the primary demand.

A key objective is to anticipate and respond to

primary demand as it occurs in the marketplace.


8/28

Demand Forecast ing

Demand forecasting is essentially a linear

process of translating input assumptions into a

forecast of expected sales; demand

management, on the other hand, is a highly

iterative process that involves driving to a

revenue and profit target through prioritization of

customers, channels, products, geographiesand the demand stimulation programs available

to the enterprise.


9/28

Demand Forecast ing

Keeping inventory levels low, costs down and

customers happy in a Web based, now largely

global marketplace requires companies to

proactively forecast and manage supply anddemand dynamically supported by best-of-

breed techniques, technologies and practices.

Today, this calls for a delicate balance of art,

science and technology.


10/28

Demand Forecast ing

Numerous forces, some of which overlap, must

come into play:

InternalThe brand; market segment; product mix;

corporate culture; sales performance; geographicpresence, and customer satisfaction levels

Economic The industry; the business climate;

market share; financial performance; unemployment

rates, and IT expenditures Technological Current install base;

hardware/software changes; price/performance vs.

competition, and benchmarks.


11/28

11


12/28

From Plann ing to Managing

Demand planning has enabled companies to more

accurately forecast what their industry, market and

customers will require.

This is not a new concept, but for first-generation

Internet-dependent enterprises, demand planning has

permitted them to link and integrate processes across

networks; enable closer collaboration among previously

isolated parties; respond dynamically to market and

consumer trends, and deliver a better, more rewardingexperience across the value chain.

12


13/28

From Plann ing to Managing

Armed with advanced tools, technologies and

forecasting methodologies, businesses have honed their

ability to view numbers and predict information within

various contexts, model independent and dependent

demand among products and channels, and generatestatistically based forecasts based on the most recent

data, causal factors and events.

This has helped fulfill the demands of a more

challenging customer base; better leverage past productperformance; more effectively predict and manage

replenishment; align price and profit margins; and

maintain a leaner, more profitable supply chain overall.

13


14/28

Forecast ing and responding

in real-t ime

Organizations looking for an effective demand

management model should seek a Web-based solution

that provides high levels of scalability, economy,

usability, availability, synergy and functionality.

Such a platform should support a real-time feedback

loop that is designed to enable an enterprise to

dynamically forecast against a number of variables,

such as supply, customer orders, inventory, and financial

objectives.

14


15/28

Collaborative Planning, Forecasting, and

Replenishment

CPFR is recognized as a breakthrough businessmodel for planning, forecasting, andreplenishment.

Uses available Internet-based technologies tocollaborate from operational planning throughexecution.

Developed by Wal-Mart and Warner-Lambert in

1995.


16/28


17/28

Collaborative Planning, Forecasting, and

Replenishment

The plan and the forecast are entered bysuppliers and buyers into an Internet accessiblesystem.

Within established parameters, any of theparticipating partners is empowered to changethe forecast.

Only a few CPFR initiatives have been made

public, but results are impressive.


18/28

A comprehensive demand management

so lu t ion

A comprehensive demand management solution should

enable a business to:

Synchronize global planning

Forecast only the products and components that make sense

from a profit and/or strategic perspective

Utilize best-of-breed statistical forecasting techniques

Employ a forecasting tool that balances performance and

scalability

Apply event-based planning Perform real-time data synchronization.

Employ rules-based modeling


19/28

A comprehensive demand management

so lu t ion

Simplify multidimensional analysis with easy-to-use tools

Afford a seamless workflow

Benefit from an open, services-based, 64-bit architecture and

a common Web interface

Utilize industry-standard databases

Employ automated, closed-loop, industry-specific workflows

based on best practices

Gather predictive intelligence with proactive demand

indicators Enable more efficient collaboration with all internal

stakeholders and external partners.


20/28

Order Fulfillment and Order

Management

Order fulfillment activities differ as a supplychain matures through transactional tointeractive to interdependent levels.

Typical Order fulfillment cycle involves fiveactivities:

Order Transmission

Order Processing

Order Selection Order Transportation and

Customer Delivery


21/28

Order Fulfillment and Order

Management

Order-management systems represent the

principal means by which buyers and sellers

communicate information relating to individual

product orders and is key to operationalefficiency and customer satisfaction.


22/28

Order-Management Functions


23/28

Customer Service

Customer service is often the key link between

logistics and marketing.


24/28

Customer Service

Defining customer service

In terms of levels of product

In terms of types of customer support/service

In terms of levels of involvement

In terms of complexity of customer service


25/28

Customer Service

Elements of Customer Service

Time

Dependability

Cycle timeSafe delivery

Correct orders

Communications Convenience


26/28

Customer Service:

Performance Measures

Traditional % availability in base units

Speed and consistency

Response time to special

requests

Speed, accuracy, andmessage detail ofresponse

Response and recoverytime requirements

Response time, quality ofresponse

New Orders received on

time

Orders received

complete Orders received

damage free

Orders filledaccurately

Orders billedaccurately


27/28

Customer Service: Overview

If the basics of customer service are not inplace, nothing else matters.

Customers may define service differently.

All customer accounts are not the same. Relationships are not one dimensional.

Partnerships and added value can lock upcustomers.


28/28

Stockouts

Four possible outcomes from a stockout

Customers wait

Back orders

Lost sales Lost customers

demand mgmt and customer service

Documents