Too Many Links in the Chain

Up until recent times the focus of many businesses has been on Supply Chain Management (SCM), then like the slow-changing axis of the globe, the ‘Tipping Point’ was reached and the focus flipped to Demand Chain Management (DCM): all of a sudden, North became South – and vice versa.

Social media has been a major factor in driving this change.

Now, it begins with the customer and flows backward through resellers, distributors to the origins.

However, it all falls apart when the supplier stills plays the supplierpush versus consumerpull game – and many corporations haven’t woken up to this yet!

There is also one big difference in the transactional relationship, the consumer can jump from communication channel to communication channel within the supplier organization and also jump across product categories and service offerings at will.

Yet there is still a mad scramble to corral the wild consumer beast!

Compounding the traditional transactional relationship, competition is changing the dynamic between the supplier and consumer. As competition increases, (thankfully some would say) the client has risen to an unchallenged position of power where companies may well rise or fall in quick time depending on their response to this changing dynamic.

Does your organization follow the ‘push’ or ‘pull’ model?

Some still argue that DCM is an outflow of SCM where the organization’s supply chain processes are managed to deliver best value according to the demands of the customer.

Isn’t that like arguing one should look down the fat end of the telescope?

Nonsense, it’s now a whole new ball game!

Here is but one example: a fast food café owner who for years has continually been under price pressure to sustain the business, now sources product direct from the manufacturer (often off-shore) rather than the local distributor/agent. He continues to jump from one communication channel to another within the supply chain and then across product categories as consumer tastes change.

The internet is his foil in this game of survival.

He has been forced to remove several links in the supply chain to reduce costs.

On closer inspection of retail chain outlets, one discovers that many are franchised – not corporation owned. The consequence is that an additional link has been added to the Supply-Demand chain, with the obvious consequence – costs go up.

Not surprisingly, the franchisee wants to make a healthy profit but has no control over the supply-chain. The consequence being, consumers jump supply channels.

Yep, they join the internet buyer community.

Now why would they go and do that?

And the kicker is? Big brand corporations are screaming at governments to whip the consumer community back into line to continue to source their products from the bloated-cost corporate chains.

Solution? Dump the old business model and join the new!

DCM arrived last Monday- and it ain’t going away Friday – or any time soon!

Best to join the movement – failing that – would the last one out please turn off the lights!

Oh, just in case the agenda is to manipulate the communication channels to get the supply chain message out, it might work today, but will most certainly fail tomorrow!

There are just far too many channels out there to manipulate – they are called people texting people – and it spreads like wildfire!

Contagion on Steroids!

Or, has this author lost one too many links in his cognitive chain?

4 thoughts on “Too Many Links in the Chain

  • Yes, isn’t technological developments wonderful. Tap right into the mind of the consumers, see how many are thinking of a particular problem and/or looking for the solution(s). Simplistically speaking, capitalize on this data by producing the product and getting it to the marketplace for profit. This makes sense when you think about where a majority of ideas for products may come from or how products are created to solve problems/satisfy needs.

    Comment from: Jen-USA

  • The advantage of DCM is that consumers propose various products. DCM using virtual interactions has the advantage that consumer’s opinions can be easily obtained

    Comment from: Todd

  • Jen-USA,
    There is a convergence of technologies where computers, tablets/pads and phones are becoming as one. We also see communications applications (like Google) morphing into a format where we can now communicate across all these technologies in one step and receive the same way. The metrics available from these applications now show us which communication (in text of graphic form) resontated the best in the minds of the recipient and where the recipient is located. Thus, we can rejig the message or product offering in quick time to better engage that community. Furthermore, the private ‘me’ is now morphing into the corporate ‘me’. The individual’s ID and persona is now becoming inextricably interwoven with the corporate ‘me’ and the product itself. So, is the private ‘me’ now becoming the product, or is it still the corporation with the product brand?

    Comment from: Strategic Outcomes

  • This is a good reminder to utilize all tools at hand small (like a phone to text) or big (like a website) for product expansion. I’m wondering in doing market research would it also not be wise to do market research on products that can be manipulated to communicate with the marketplace? What’s being created and developed next.

    Comment from: jen-USA

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