UNDERSTAND WHAT YOUR CUSTOMERS WANT, WHEN THEY WANT IT
One of the biggest challenges for any organization is to understand the consumer demand for the goods and services that it offers in the marketplace. However, the story does not just end with understanding demand patterns. The actual magic, should a company be able to effectively harness it, lies in “managing” that demand.
Often, management will deplete its trained resources in a downturn due to less demand. When organizations do this, they will not be prepared for any upturn when demand increases. At the least a costly ramp up may be such a stress upon the organization that no rapid response is possible and the opportunity to return to previous volumes cannot be seized. The business is sourced to the organization that had developed the ecosystem for recovery – opportunity lost.
Through demand management, CGN Global works with companies of all types to better predict customer needs, creating an agile organization – transformed to not only handle ups and downs, but embrace the volatility and turn it into a competitive advantage.
UNDERSTANDING AND RESPONDING TO UNCONSTRAINED DEMAND
CGN partners with organizations in all industries to create a demand driven network. A true demand driven network is capable of generating superior economic results driving a true advantage over competitors in the marketplace. The key to making the transition includes:
- Complete transparency across all players in the value network
- Dynamic inventory management across selling channels
- Dynamic management of pricing and capacity to respond to customer trends
- Clear view of “Active” and “Passive” capacity and associated switching costs
- Integrated global view of risk and opportunity
THE ART OF DEMAND SHAPING
A more evolved approach of dealing with demand challenges is to actively shape incoming demand and manage it. While different organizations deal with the challenge differently, almost all of them include a key understanding of “What is the customer actually paying for”? Some examples of demand shaping include:
- Irreplaceable-ness – The best form of demand shaping is when the customer will wait for a product/service to become available no matter the cost or time. Such exclusivity is usually associated with an IP protected or highly regulated environment. In such a situation, the manufacturer can dictate terms to the market till the exclusivity lasts (which is unequivocally not forever).
- Promotions – Almost all organizations use promotions to spur sales. Effective organizations use the right promotion for the right customer – product/service combination to drive superior returns on their promotion $. More importantly, these organizations are able to accurately predict the sales lift from individual promotional actions to arrive at a more reliable input to the S&OP process.
- Delayed Differentiation – Many organizations deal with demand variability through their product/service architecture where a common base can be appended with specific modules much closer to the point of sale minimizing the lead time and variability felt by the whole network. E.g. printers.
- Lane Strategy – Organizations that view availability as a key differentiator in the customer buying behavior will make available vanilla configurations of their products/services at a preference over more customized offerings thereby incentivizing the customer to choose those configurations that work best for the manufacturer. E.g. cars.
- Innovation – While many people don’t value the impact of their R&D budget on managing demand, it is perhaps the most important disruptor an organization’s demand planning than any other individual action. An in-depth understanding of managing product/service cycles can be a make or break decision in managing customer demand in the market place at an enterprise level.
The right recipe depends on your current situation, the competitive landscape and most of all the customer demand. Finding the balance means finding a niche and exploiting it. In order to do this, organizations need to have the knowledge and visibility throughout the entire enterprise and product lifecycle to truly understand the operational and financial impact of shaping and managing demand.
At CGN Global, we utilize our mix of subject matter expertise in Supply Chain, Capacity Management, Data Analytics, Inventory Management and more mixed with our Industry expertise to bring dynamic Demand Management solutions to Fortune 500 companies around the world. We use our knowledge and vast experience to create a unique solution for each of our customers. We look at demand from end-to-end point of view, starting with what the customer wants to delivering it in the most efficient and effective way possible.
For more information on CGN's Demand Management capabilities, please contact: