Abstract
Most current supply chain models were developed during a period of relative stability. Today, the environment is discontinuous, volatile and unpredictable. This requires a major rethinking and revitalisation of existing supply chain models. Supply chains are much more than warehouses, transportation and technology, they are people powered and have to be treated as social and political as well as economic and technical systems.The most difficult yet challenging and rewarding factor is the change of mindset from approaches based on the old industrial paradigm to the new knowledge oriented paradigm. From "one size fits all" to customisation and buyer behaviour oriented segmentation based on structural flexibility. The new approach requires a change of processes and management systems, but most of all, a change of mindset, organisation structure and behaviour.This may create internal resistance that has to be overcome to reach the desired future state. This future state is highly dependent on cooperation and consensus with external companies, and the next step is therefore to extend the alignment approach to the chosen partners in the demand chain. The development towards channel rather than company competition requires an interorganisational approach to channel design. Internal alignment and cooperation is necessary but not sufficient, which means that an agile and dynamically aligned demand chain has to be created.All this is well known and documented in both research and theory. However, the challenge is to implement these theories, models and behaviour in practice. This paper presents one practical approach to implementation of the theories put forth by Ericsson [Ericsson D, 2011, Demand chain management - The evolution, ORiON, 27(1), pp. 45-81.].
Highlights
The business world has changed so much over the last 15 years that conventional methods are no longer sufficient
This paper presents one practical approach to implementation of the theories put forth by Ericsson [Ericsson D, 2011, Demand chain management — The evolution, ORiON, 27(1), pp. 45–81.]
Steve has more than 10 years experience from different positions in both small and large companies and he is a Master of Business Administration, majoring in Logistics and Demand Chain Management (DCM)
Summary
The business world has changed so much over the last 15 years that conventional methods are no longer sufficient. The choice of supply chain strategy has to be based upon a careful analysis of the customer buying behaviour in different market segments. Co-creation and mutual dependence is evolving between certain, chosen suppliers, the focal firm and certain, chosen customers In this way, a winning coalition with common values, goals, key process indicators, and reward systems is created (Ericsson, 1976 & 2011). We have seen a big shift from a closed system approach based on planning and control, via efforts to master distortions and create dynamic flexibility to today’s efforts to increase structural flexibility. A subset that focuses on the specific approach needed to create supply chains based on strategic partnership and common goals and values. The steps in a change process may be highlighted and illustrated by putting ourselves in the shoes of a top executive who really wants to explore and implement the new ideas, concepts, tools and approaches
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