Ultimate Enterprise Value Creation Using Demand Based Management

Abstract

The 70’s has often been viewed as the decade of quality improvement, during which companies began to invest heavily in quality improvements, and Total Quality Management became a buzzword. In the 80’s, with quality a given, the competitive landscape shifted to lean manufacturing, focusing on concepts such as just-in-time, flexible manufacturing, and zero inventory, in order to achieve manufacturing excellence. In the 90’s, market globalization, shortening product life cycles, and the disintegration of many industries created the race to improve the supply chain. In the last decade, industry after industry has embarked on aggressive initiatives to improve the operational efficiencies of their supply chains. Industry-wide efforts began with Efficient Consumer Response for the grocery industry and spread to other sectors such as food service, pharmaceutical, semiconductor, computer and electronics, telecommunications, and automobile. Companies investing in supply chain efforts have found significant improvements in inventory, customer service, response times, and operational costs. To support this, we have seen tremendous growth of supply chain management (SCM) technology solutions. What will be the next competitive battleground in the 21st century? It will be managing to demand for the total value maximization of the enterprise and the supply chains – Demand-Based Management. Demand-Based Management is critical to an enterprise in managing its supply chain, product development, technology strategy, service support, and organization design. Applying Demand-Based Management to integrate supply and demand management happens to be a big opportunity. Managing to demand involves carefully selecting marketing instruments and working closely with customers so that the overall incoming demand for the enterprise and the supply chain will give rise to