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2. Implement differentiated demand policies in core functions
It was not too long ago that demand was thought of as a single requirement to which the
supply chain reacted. Today, we know that demand signals can come in the form of orders,
forecasts, and safety stock, and that they can come from different channels (retail, Web,
distributors, and enterprise) and from different sources (original equipment manufacturers
[OEMs], aftermarket/spares). Furthermore, demand signals can come from different customer
types, as discussed in the previous section (large, highly profitably customers versus small,
unprofitable customers).
In order for the supply chain to align with segmentation strategies, the demand signals within
core supply chain management functions—such as master planning, transportation planning,
distribution planning, and factory planning—must be prioritized in a way that aligns with those
strategies. The demand priorities must be driven by the overall segmentation strategy that is tied
to the service/profitability framework discussed in the previous section. Supply chain
management systems for these core functions must be intelligent enough to incorporate and
make decisions using these priorities. The systems must also be easy to configure and be able to
adapt to changing priorities.
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