Apr 22, 2010 | Demand chains, Leadership
Isn’t it interesting, when we pay for something, we have an expectation of what that transaction will deliver to us, but there is little sense of lingering obligation.
However, if we just do something for someone, any small piece of kindness or consideration, it creates a bond, and often a feeling of obligation that the kindness requires some reciprocal consideration on the part of the receiver.
This reciprocal obligation dynamic exists in the best demand chains, smoothing the path through the chain of whatever product or service the chain is set up to provide.
Any chain is a set of transactions, but the dynamics of a transaction are nowhere near as important to the individuals performing the transactions as the overall performance of the chain, and so they use initiative, alter the status quo, innovate, and generally go that bit extra, recognizing implicitly the value of the action to the performance of the chain, and it is their contribution to the performance of the chain that is the motivation, just completing the not the immediate transaction.
Apr 21, 2010 | Customers, Demand chains, Leadership
Integrated value chains are nothing new. IBM had one before it started “outsourcing” what turned out to be the future to Microsoft and Intel, Ford had one at centered around the Dearborn factory, from where the company controlled by owning everything from growing the cattle to supply the leather for the T model seats, to the end of the production line, and beyond, and even the Venetian shipyards way back in the 1400’s was an integrated chain.
What has changed are the tools by which we can manage integrated value chains, and the recognition that they do not necessarily need to be controlled by equity, the power of the customer is far more potent.
Apr 18, 2010 | Communication, Demand chains, Innovation, Social Media
Can you imagine the changes that would have occurred in the behavior of the tobacco industry in the 70’s and 80’s had there been the “net-enabled” communication tools available then, when the big tobacco companies were conducting a rear guard action against those who sought to have the lethal effects of tobacco on health made public.
Simply, they would not have got away with 20 years of denial, the ridicule circulating via blogs, twitter, Digg and all the rest would have been overwhelming.
When you think about it, the negative reaction that would have occurred may have been better than all the public advertising that has gone on since the 80’s, sanctimonious adults telling youngsters what to do (again) whilst still taking the taxes.
Apr 11, 2010 | Demand chains, Management, Operations
Developing a forecast of what you need to make to sell is a different proposition to doing a demand forecast, it is much more than a semantic difference.
A forecast is usually an extrapolation, sometimes very sophisticated, but an extrapolation nonetheless, of the past, and the only thing we know for sure, is that the future will be different.
A demand forecast looks at the drivers of demand, essentially looking backwards through the supply chain from the customer, and anticipating the level of demand by factoring in all the things that drive the customer to order a volume of product in any given period.
ERP systems are driven by forecasts, they are the core of any system, and the more accurately the forecast, the better the system works within the limitation of the rules written in. However, when the forecasts are informed by the drivers of demand, not just the inventory levels and automatic restocking rules in place, the value that can be delivered in vastly enhanced.
Mar 31, 2010 | Alliance management, Change, Demand chains, OE
It seems that everywhere there is a drive to collaborate, without any real regard to the challenges of collaboration, the behavioral and cultural changes necessary for success. Collaboration has become an end in itself, rather than a strategy that has the potential to deliver value to both parties under the appropriate circumstances.
For a collaboration to be successful, there are two pre-conditions:
- There is a genuinely important shared goal, and the goal is powerful enough to drive resource allocation decisions in both collaborators
- The reward systems of both parties recognise the importance of achieving the goal.
Without these two preconditions, there is little chance of the collaboration doing anything more than take some time, probably cover someone’s arse, and perhaps give the appearance of something useful happening.
Jan 7, 2010 | Demand chains, Management, Strategy
Alliances form because organizations have similarities, and commonalities that promise synergy.
However, most alliances fail because they fail to manage the areas if dissimilarity.
Leo Tolstoy remarked that happy marriages were the result of the manner in which partners dealt with incompatibility, not how compatible they were.
It is the same in a commercial alliance, the literature is full of examples of alliances of one sort or another that emerged because of the prevailing logic of moving into adjacent market areas by merger or take-over, based on seemingly common customers, technologies, channels, or philosophies, only to find a disaster waiting because they failed to see how some dissimilarity that had not been considered relevant threw a spanner in the works, and cost the alliance.
After the synergies have been identified and quantified, but before the deal is done, have a separate group look for the areas where there are no synergies, where the organisations differ substantially, and assess their impact on the potential for disruption of the alliance working as well as the optimists predict.
