Building Demand-Driven Supply Chains with Reveal

Capturing the rapid changes in demand and making the necessary adjustments to demand fluctuations in the system is an aspiration for many companies. However, because companies are manufacturing what they know they need and filling the demand, they keep making the product whether it is needed or not. This demand fulfilment is also the result of production planning done in advance without any knowledge of the actual demand in the system arising from the lack of alignment with the sales forecast.

Businesses employ a push-based supply chain strategy, driven by historical data or plant production capacity rather than effectively managing inventory to align with actual market demand. This approach often results in inefficiencies such as surplus raw materials, low inventory turnover, unproductive usage of storage space and ultimately leads to crisis management, reactive communication, and contributes to a production plan that doesn’t accurately reflect consumer demand.

In contrast, transitioning to a pull-based supply chain strategy enhances business efficiency by accurately responding to customer requirements. This method promotes business agility, optimizes operational planning, and allows the learning from discrepancies to improve forecast accuracy. Additionally, a pull system promotes a unified management approach, utilizing a single data set and assumptions for business decision-making. A pull supply chain can generate a number of benefits including production accuracy, real-time production, shorter lots/cycles, inventory optimization, waste reduction, insights-driven management and proactive communication.

Thus, it is crucial for organizations to gain a deep understanding of the factors influencing their forecast trends. The optimal strategy for managing volatility includes the systematic establishment and documentation of assumptions, which further enables a comparative analysis of actual versus projected production over time. However, while these processes often occur in isolation, they are more effective when integrated as cross-functional activities within the organization.

Effective demand-driven planning necessitates reliable data, transparency, and a level of tolerance for forecast inaccuracies to avoid organizational friction and metric misalignment. Accurate forecasting is integral to a demand-driven supply chain. By harnessing the power of demand-driven operations through efficient utilization and enhancement of forecasting capabilities within SAP, and implementing effective planning strategies, businesses can attain agile and optimized production processes, forecasts, inventory transfers, and inter-company sales. Consequently, businesses can reap the benefits of a flexible and effective supply chain that includes shorter cycles, reduced lead times, optimized stock levels, minimized waste, and insight-based management. This also reduces procedural integration breakdowns and enhances proactive communication within the integrated supply chain.

Reveal‘s proprietary methodology, oVo®, centered around value creation, assists enterprises in fine-tuning their procurement and manufacturing procedures to satisfy market demands. This approach encourages organizations to rely on a unified, authoritative data source for improved decision-making and streamlined operations. The oVo approach effectively addresses the common obstacles encountered by corporations by establishing a well-defined strategic plan, illustrating the tangible business benefits to be realized at each stage. Integral to this strategic plan are components of change management, enabling consistent transformation across the organization from inception.

In contrast to the traditional SAP implementations that primarily emphasize transaction execution, the oVo method prioritizes empowering organizations to fully harness the system’s capabilities and functionality, facilitating improved and data-driven decion-making pragmatically influence personnel behaviors towards enhancing business value. The three-phase strategy of the oVo enables businesses to effectively influence people’s actions in a manner that drives tangible business benefits. The three phases are:

The assessment phase addresses unrecognized knowledge gaps. This phase establishes a benchmark of am organization’s position on the Business Maturity® Continuum, while simultaneously crafting a roadmap for improvement and justifying the necessity for change.

The transformation phase focuses on refining processes and data that is achieved through education, the application or initiation of standard SAP capabilities, and the creation of Key Performance Indicators (KPIs) to gauge cross-functional performance.

The sustain phase is about strengthening, ongoing refinement, and additional training in the strategic application of SAP.

Reveal assists organizations in enhancing internal business operations, educating users, and effectively utilizing SAP to attain lasting, measurable benefits. Whether it involves enhancing supply chain efficiency or incorporating extra SAP features, Reveal enables organizations to optimize their processes and leverage SAP intelligently. By encouraging organizations to shift from a transaction-focused approach to becoming information-driven entities that proactively manage processes and leverage knowledge, they can realize improvements in agility, service quality, cost-effectiveness, and inventory performance.