An outstanding presentation from David Holmes of Oliver Wight Consulting. It outlines the many issues associated with matching supply and demand, and offers some guides on how to achieve a proper articulation. Offered through SupplyChainBrain.
968934-1: Demand Control: A Critical Process When Orders Exceed Supply or Orders Are Less Than Planned.
The discussion matches with a lot of my experience in high tech companies. In those days we did not have all the great analytical tools that now exist, and that many companies have. It was all we could do to keep ERP running. But the processes are what is required. The software just makes facts available.
Decisions are not made on facts, though, but on hypotheses which can be tested hopefully with a high enough probability and in a short enough time to make a correction (plan B) if something goes wrong. Firms need the discipline of reviewing the match of supply and demand and what they are doing about it in a formal way.
I find it interesting that many of the bottom-up processes David discusses are those entrepreneurs are dealing with every day. The top-down processes, longer term and more strategic, is what we are good at teaching about in business school.
And another comment I found interesting: David’s assertion that often he finds that a company’s decision makers know what needs to be done— they just aren’t doing it! That to me is the essence of operations management; if we know what to do, why aren’t we doing it?
There are many good white papers on the subject at