{"id":7165,"date":"2020-07-29T07:01:33","date_gmt":"2020-07-29T12:01:33","guid":{"rendered":"https:\/\/flevy.com\/blog\/?p=7165"},"modified":"2020-07-28T16:07:38","modified_gmt":"2020-07-28T21:07:38","slug":"solving-the-great-divide-5-step-approach-for-successful-supply-demand-integration","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/solving-the-great-divide-5-step-approach-for-successful-supply-demand-integration\/","title":{"rendered":"Solving the &#8220;Great Divide&#8221; &#8211; 5 Step Approach For Successful Supply Demand Integration"},"content":{"rendered":"<p>The \u201cGreat Divide\u201d as referred to by Peter Drucker is the perennial issue of disconnect between Demand and Supply side within organizations.<\/p>\n<p>Companies are trapped in a pattern of reacting to the whims of the marketplace without developing a proactively designed supply capacity. Curiously enough, such companies are often the victims of their own success &#8212; marketing programs that are not integrated with supply plans end up creating more demand than the company can fulfill. To create a more efficient and effective business model, companies must acknowledge that they need to integrate Demand and Supply Systems.\u00a0 This is an important concept of <a href=\"https:\/\/flevy.com\/browse\/stream\/supply-chain\">Supply Chain Management<\/a> to understand and master.<\/p>\n<p><strong>Addressing The &#8220;Great Divide&#8221;\u00a0<\/strong><\/p>\n<p>The disconnect between demand generation and supply fulfillment activities have made organizations suffer consequences of conflicting objectives and sub-optimal resource allocation. For example, discord between Sales and Production teams within an organization inevitably leads to sub-optimal resourcing decisions, customer dissatisfaction and loss of business opportunities.<\/p>\n<p><strong><a href=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/photo-of-people-holding-each-other-s-hands-3184423.jpg\"><img decoding=\"async\" class=\"wp-image-7176 size-medium alignright\" src=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/photo-of-people-holding-each-other-s-hands-3184423-200x300.jpg\" alt=\"\" width=\"200\" height=\"300\" srcset=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/photo-of-people-holding-each-other-s-hands-3184423-200x300.jpg 200w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/photo-of-people-holding-each-other-s-hands-3184423-768x1151.jpg 768w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/photo-of-people-holding-each-other-s-hands-3184423-683x1024.jpg 683w\" sizes=\"(max-width: 200px) 100vw, 200px\" \/><\/a><\/strong>Studies conducted on successful organizations which bridged the gap between Supply and Demand side reveals the following underlying realities.<\/p>\n<ul>\n<li>Value requirements often vary significantly across customers or segments of choice, demanding cost efficiency in some cases and product and service differentiation in others.<\/li>\n<li>Unlike Sales, which has learned to tailor its offerings to the customer, the operational side of the enterprise is often incapable of altering its service proposition.<\/li>\n<\/ul>\n<p><strong>The 5 Stages of Successful Supply Demand Integration<\/strong><\/p>\n<p>Focused research and studies on the subject across various organizations through multiple industries, makes it evident that organizations which got their Supply and Demand successfully integrated goes to 5 stages.<\/p>\n<p><a href=\"https:\/\/flevy.com\/browse\/flevypro\/supply-and-demand-integration-5100\"><img decoding=\"async\" class=\"alignnone wp-image-7170 size-large\" src=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/Demand-Supply-1024x768.png\" alt=\"\" width=\"1024\" height=\"768\" srcset=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/Demand-Supply-1024x768.png 1024w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/Demand-Supply-300x225.png 300w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/Demand-Supply-768x576.png 768w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/07\/Demand-Supply.png 1440w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/p>\n<h2>Brief Outline<\/h2>\n<p><strong>Stage 1: Develop a value focus<\/strong> &#8211;\u00a0Senior leaders must cultivate a focus on creating value for the organization and for customers.<\/p>\n<p><strong>Stage 2: Share knowledge across the organization<\/strong> &#8211;\u00a0Managers must work on building inter-functional collaboration within the company, building external collaboration with Supply Chain partners and adopting technology that facilitates collaboration.<\/p>\n<p><strong>Stage 3: Allocate resources strategically &#8211;\u00a0<\/strong>\u00a0Once the entire organization shares the same set of facts, the company can then begin to make more thoughtful analysis of where and where-not to allocate resources based on which customers deserve priority.<\/p>\n<p><strong>Stage 4: Learn to walk the talk &#8211;\u00a0<\/strong>Executives at this stage make individuals accountable not just for their own unit\u2019s performance but for\u00a0 \u00a0the overall performance of the organization.<\/p>\n<h2><strong>Case Example<\/strong><\/h2>\n<p>Dell serves as an early example of successfully implemented Demand and Supply Integration.<\/p>\n<p>In 1999, one customer (a leading author) ordered a computer three weeks before Christmas. It was a gift for his sons, and as such, he had a very specific time frame in which to receive it. So when he received a confirmation email stating that the computer would be ready on February 16, 2000, he replied that he needed the computer much earlier. A service representative researched the delay and explained that the 400 megahertz Pentium chip that he had ordered was particularly popular and, as a result, was backlogged. Rather than leaving a customer dissatisfied, the service rep suggested a way around the supply chain bottleneck. For an additional $50, Dell could upgrade the Pentium chip and ship the computer within a week. The author readily agreed, and the computer was received well before December 25.<\/p>\n<p>The customer&#8217;s needs had been met, and at a price that was reasonable to him.<\/p>\n<p>Interested in gaining more understanding of these 5 steps to successful\u00a0\u00a0<a href=\"https:\/\/flevy.com\/browse\/flevypro\/supply-and-demand-integration-5100\">Supply and Demand Integration<\/a>?\u00a0 You can learn more and download an\u00a0editable\u00a0<a href=\"https:\/\/flevy.com\/browse\/flevypro\/supply-and-demand-integration-5100\">PowerPoint about <strong>Supply and Demand Integration<\/strong>\u00a0here on the Flevy documents marketplace.<\/a><\/p>\n<h2><strong>Are you a Management Consultant?<\/strong><\/h2>\n<p>You can download this and hundreds of other\u00a0<a href=\"http:\/\/flevy.com\/pro\/library\/frameworks\">consulting frameworks<\/a>\u00a0and\u00a0<a href=\"http:\/\/flevy.com\/pro\/library\/consulting\">consulting training guides<\/a>\u00a0from the\u00a0<a href=\"http:\/\/flevy.com\/pro\/library\">FlevyPro library<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The \u201cGreat Divide\u201d as referred to by Peter Drucker is the perennial issue of disconnect between Demand and Supply side within organizations. Companies are trapped in a pattern of reacting to the whims of the marketplace without developing a proactively designed supply capacity. Curiously enough, such companies are often the victims of their own success&hellip;&nbsp;<a href=\"https:\/\/flevy.com\/blog\/solving-the-great-divide-5-step-approach-for-successful-supply-demand-integration\/\" rel=\"bookmark\"><span class=\"screen-reader-text\">Solving the &#8220;Great Divide&#8221; &#8211; 5 Step Approach For Successful Supply Demand Integration<\/span><\/a><\/p>\n","protected":false},"author":124,"featured_media":7176,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[82],"tags":[1532,500,2113],"class_list":["post-7165","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-operations","tag-demand-management","tag-supply-chain-management","tag-supply-management"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/124"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=7165"}],"version-history":[{"count":13,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7165\/revisions"}],"predecessor-version":[{"id":7203,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7165\/revisions\/7203"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/7176"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=7165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=7165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=7165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}