August 13, 2008

Focussing on demand chain planning

A supply chain view of a firm sees markets as final destination. However it is advisable that the company should first think of the target market and then design the supply chain backward from that point. This view is called demand chain planning. Demand chain planning yields several insights
  1. The company can estimate whether more money is made upstream or downstream, in case it might want to integrate backward or forward.

  2. The company is more aware of disturbances anywhere in the supply chain that might cause costs, prices, or supplies to change suddenly.

  3. Companies can go online with their business partners to carry on faster and more accurate communications, transactions, and payments to reduce costs, speed up information, and increase accuracy.

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