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Concept
Demand-chain management
Summary
Demand-chain management (DCM) is the management of relationships between suppliers and customers to deliver the best value to the customer at the least cost to the demand chain as a whole. Demand-chain management is similar to supply-chain management but with special regard to the customers.
Demand-chain-management software tools bridge the gap between the customer-relationship management and the supply-chain management. The organization's supply chain processes are managed to deliver best value according to the demand of the customers. DCM creates strategic assets for the firm in terms of the overall value creation as it enables the firm to implement and integrate marketing and supply chain management (SCM) strategies that improve its overall performance. A study of the university in Wageningen (the Netherlands) sees DCM as an extension of supply chain management, due to its incorporation of the market-orientation perspective on its concept.
A Demand-driven supply network (DDSN) is one method of supply-chain management which involves building supply chains in response to demand signals. The main force of DDSN is that it is driven by customers demand. In comparison with the traditional supply chain, DDSN uses the pull technique. It gives DDSN market opportunities to share more information and to collaborate with others in the supply chain.
DDSN uses a capability model that consist of four levels. The first level is Reacting, the second level is Anticipating, the third level is Collaborating and the last level is Orchestrating. The first two levels focus on the internal supply chain while the last two levels concentrate on external relations throughout the Extended Enterprise.
In a demand-driven chain, a customer activates the flow by ordering from the retailer, who reorders from the wholesaler, who reorders from the manufacturer, who reorders raw materials from suppliers. Orders flow backward, up the chain, in this structure.
Many companies are trying to shift from a build-to-forecast to a build-to-order discipline.
Official source
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