The concept of Demand Driven Supply Networks (DDSN) was championed by AMR Research as way of designing supply chain networks around customer demand. The article I published yesterday on RFID scanning at a grocery store check out is a perfect example. The customer departs the store with his goods and the check out system not only registers the sale, it also orders a stock replenishment from the warehouse.
When the customer makes his purchase, a demand is driven back to the distribution center to replenish the store, but it also should trigger an order from the supplier to replenish the DC. While systems can signal activity, ultimately it comes down to a person to manufacture the product, to pick, pack and ship it, to receive it into a warehouse and manipulate it to make it ready for sale, etc.
I wrote another article last week on managing the fourth layer of a supply chain...human capital. Supply chains have traditionally been thought of as the movement of goods, data about the goods, and the money to buy and sell them. Now with supply chains becoming increasingly global and complex, this idea of personnel management in supply chains is becoming a BIG deal.
If you ask an HR manager if he thinks his function is critical to the logistics and supply chain movement of his companies products, I would guess he would say "NO". Probably because he hasn't thought about it and doesn't see the direct connection.
The Supply Chain Execution Systems and Technologies Group, and member corporation Red Prairie Corporation have released an excellent white paper on this subject and how to manage the effective use and scheduling of labor in a Demand Driven Supply Network environment. Labor accounts for approximately 50-70% of distribution costs, so efficient management of personnel can have direct impact on supply chain expense and profitability.
Download the White Paper Here: Creating the Demand Driven Workforce
Eric
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