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- Aug. 16, 2012 -

 
     
 

Supply Chain Graphic of the Week: The New Supply-Demand Challenge

 

Supply and Demand are Moving at Different Clock Speeds, IDC Says; Ways to Resolve the Friction

 
     
 

By SCDigest Editorial Staff

 
 

 

Balancing supply and demand - that's what supply chain is all about, isn't it? The reason we have the whole discipline of supply chain management, and at the core of the practice of the art?

So why is a seemingly simple graphic of matching supply with demand our supply chain graphic of the week?

 

In our OnTarget newsletter earlier this week, we did a summary of a new research report from the analysts at IDC Manufacturing Insights, which contains some interesting data relative to supply chain priorites among manufacturers and other subjects. (See IDC Manufacturing Insights Study Finds Procurement Seen as Top Driver to Reduce Overall Supply Chain Costs.)

 

But we were also intrigued by the simple graphic below that was presented in the introduction to the study data:

 

 

 

IDC says that a variety of forces, from the "empowered consumer" to dynamic and rising input costs to global network complexity are making many of the not so old rules we had about balancing supply and demand obsolete.

 

"At the core though, the challenge - and opportunity - for manufacturing organizations is to better manage the inherent friction between the supply and the demand sides of the supply chain," analysts Simon Ellis and Kimberly Knickle write.

 

The concept behind the graphic is that "the supply chain is increasingly defined by its two halves and that these halves appear to be moving in different directions and operating at two different clock speeds," they add. "In between the two sides are those "capabilities" that manufacturing companies are employing (and can employ) beyond traditional approaches like buffer inventories to better align supply and demand."

 

What are we on  now, supply-demand balancing 3.0 or something? Regardless, the good news is our companies really need us to succeed.

 

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