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Demand-driven planning must top the agenda

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Conducting business in South Africa presents a unique set of challenges. Forecast-driven companies can no longer rely on a five-year strategy to keep them competitive.

Charles Kotze, pre-sales manager for Navigor, says the time is now for CEOs to adopt demand-driven thinking. The demand-driven capabilities of Navigor’s latest Oracle offering, Demantra, enables companies to sense demand in real time and closer to the point of consumption.
Demand-driven planning offers companies a set of management strategies, operational methologies, and technology solutions that accomplish just what the name implies, continually reducing information and response time to drive a direct response to demand.
Forecasting, Kotze says, usually has two outcomes – over forecasting or under forecasting. Reduced margin, obsolescence and excess inventory are but some of the implications of over forecasting, while lower customer satisfaction, order expediting cost and lost revenue will reflect under forecasting.
The demand-driven company runs on real-time information. Its ability to precisely predict demand to identify potential problems, along with better optimisation of supply, results in a more profitable bottom line.
It is essentially about moving away from an internal/process past to an external/information-focused future. Predicting the future outcomes is more important, Kotze says, than recording the past, and adapting to the outside is more important than perfecting the inside.
“In a world where speed to market is critical, inventory optimisation allows companies to be able to better predict, shape and respond to demand in order to uphold their operational and strategic goals,” Kotze says.
Inventory optimisation is the balancing of supply chain management cost objectives by managing product availability and inventory investment. Effective inventory optimisation drives inefficiencies out of supply chains – reducing overall costs – while raising service levels.
South African businesses, Kotze says, have to especially realise the importance and marrying supply to demand. When supply matches demand, the supply chain becomes leaner, more agile and better able to respond to customers’ changing needs.
“A business has to be able to adapt and change to stay competitive. Demantra automates supply chain processes and uses historic and future data to give you a more realistic view of your business in the supply chain,” Kotze says.
“The concept of inventory optimisation today tops the boardroom’s IT agenda. CEOs are driving the change,” says Kotze.