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Online sales reshaping demand-driven supply chain network

July 18, 2022 - Team EdgeVerve

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With the exponential growth in e-commerce due to the global pandemic, consumers are embracing mobile operations and e-commerce channels to interact, transact & shop, and make purchasing decisions. Subsequently, communication between the organizations and consumers has become faster and more efficient.

Sensing this, sales channels have begun to evolve with streamlined strategies and efforts to tap the current emerging market potential. However, to capture the imagination of these digital consumers, the sales channels require a sleeked Demand Driven Supply Chain Network (DDSCN) strategy.

What is a demand-driven supply chain network?

Are you looking to gain clear visibility into consumer needs and behavior? Do you want to gain accurate demand forecasting?

Demand-driven supply chain network can help. It’s a system of supply-chain management that entails the creation of supply chains for reacting timely to demand signals of the consumers. It spans the entire supply chain from manufacturing, warehousing and logistics, to promotions, distribution, retail and consumer touchpoints, including digital and social media.

A demand-driven supply network (DDSN) ensures that all supply chain activities are based on actual consumer demand, ensuring that the consumer finds the right product in the right place at the right time.

The need for adopting demand-driven supply chain network

The earlier supply chains were supplier-centric that followed a linear, sequential and a static approach. The customers’ preferences are becoming more dynamic, multidirectional and altering constantly with technological advancements leading to dynamic transformations in the behavior of the consumers.

Hence, it is important that the supply chain managers make quick decisions to gain an edge over the competition Moreover global distribution planning teams must shift their concentration to individual customer requirements. For this to happen, a demand-driven supply chain is mandatory as this approach has more flexibility when compared to the traditional supply chain, which is supplier driven. Companies can adopt this strategy to accurately sense and respond to actual consumer purchases and behavior, resulting in lower inventory management costs.

Let us consider one demand-driven supply chain example below:

By implementing TradeEdge, an intelligent supply chain management platform, a leading company improved its forecast precision by 20% by using real-time sales inputs (vs. shipment) covering approximately 70% of global sales. It also enhanced one of its clients’ efficiencies by 100% after eliminating the out-of-stock and phantom inventory level.

TradeEdge, with its cloud-based solution, empowers brands to gain full visibility, develop retail execution and tap new markets quicky.

Benefits of successfully implementing a demand-driven supply network

Advantages of engaging with digital consumers via DDSN

A demand-driven supply network contributes helps companies:

To productively employ DDSN plans, consumer product firms must consider the following factors:

Future scope of demand-driven supply chain management

A demand-driven supply network (DDSN) strategy with the right implementation approach and technologies can help overcome supply chain challenges, from fragmented physical supply chains to limited visibility. DDSNs leverage collaboration and workflow tools to facilitate joint planning and execution with upstream suppliers and downstream customers, which enables organizations to receive timely and accurate data from distributors to deliver the market insights required for decision-making.

By applying these solutions to a demand driven supply chain strategy, product-based firms can immediately adjust to the ever-changing, real-time demand signals of the customers. These integrated supply chain networks can react to the signals with superior swiftness compared to the traditional approach.

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