Becoming Demand Driven Key Services

Demand Driven Supply Chains
If you could remove all of the information latency in your

supply chain, what would you change? Answer: Everything!
Demand driven supply chains align

their planning, procurement, and
replenishment processes to actual
consumption and consumer demand.
Becoming demand driven allows a company to
be more responsive to consumer needs while
increasing profitability.
Supply chains are becoming more complex as
companies expand their geographic footprint,
increasingly leverage outsourced manufacturing, and
expand their channel partner network. Supply chain
executives are looking for ways to obtain real-time,
transparent visibility across all tiers in the supply chain so
as to better align supply with actual demand to help reduce
supply disruptions and capital expenses.
Becoming demand driven Key services

A demand driven supply chain involves transforming the KPMG provides supply chain services that help business:
traditional supply chain into an integrated multi-tier supply
• Move from supply chains to supply networks
network—eliminating information latency and unnecessary
touchpoints, thereby reducing operating costs and improving To be demand driven, the traditional supply chain needs to be
profitability and customer service. managed as a highly integrated supply network in which all tiers of
partners have visibility to changes in the end-consumer demand,
and all material movements and inventory decisions are driven by
demand signals as close to the consumer as possible—capturing
actual consumption and changes in demand patterns.
Key characteristics Factories 3 Days
• Product movements driven by actual demand/consumption OEMs
• Real-time demand/supply visibility across partner tiers

• Inventory managed to dynamic target operating levels Consumers
• Early identification of demand/supply continuity issues

before they impact production Distributors
• Single demand signal shared across partner tiers –

one version of the truth T1
Suppliers T2 Legend:
Suppliers Material Lead
Time & Flow
Information Lead
Time & Flow
Demand Driven Supply Chains © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International. NDPPS 203548
• Achieve balanced cash flow
A demand driven approach achieves balanced cash flow through increased sales, reduced operating expenses, and working
capital improvements.
• Improved fill rates and reduced out-of-stocks drive increased revenue and recoverable sales.
• The reduction in information latency requires less inventory to be carried as demand uncertainty is reduced.
• Real-time visibility to the complete demand/supply picture and continuity issues reduces supply disruptions.
• Process automation reduces operating expenses, allowing buyer/planners to manage by exception.
1% – 4% 5% – 10% Reduction
Improvement
in sales
in operating expense
• Create multi-tier visibility
20% – 30%
Reduction in
Inventory Next generation supply chain technologies and SaaS platforms
Transportation
allow companies to manage planning, procurement, and
Transportation
Buffer† replenishment processes across multiple tiers of the supply
Planning
chain. With all companies leveraging a common shared
Planning Buffer† platform, information can be synchronized across partner
Sales*
Promotional
Demand tiers providing a real-time view to total demand, supply, and
Promotional
Sales
Demand capacity information.
CoGS
CoGS
Forecasted
Demand Actual
Demand
Traditional Demand Traditional Demand Traditional Demand Consumers Dist. OEM Factories Tier 1 Tier 2
Model Driven Model Driven Model Driven
Sales Levels Expense Levels Inventory Levels
Time
5 Questions to ask
Do you have visibility to your total demand and

1 supply picture at any point in time? Does this
visibility extend beyond your first-tier partners?
Are all material movements driven by actual

2
demand or by forecasted demand? The KPMG difference
Our competencies bridge the disciplines of finance,
Does it take longer than a day for demand technology, and operations to offer broad business
3 changes to propagate to your second-tier perspective with deep functional and process skills to
suppliers? understand and address your challenges. As a Big Four
accounting and auditing firm, we have a century of experience
in accounting, tax, regulatory issues, transaction services,
ow quickly can you identify and respond to a
H forensics, compliance, and financial risk.
4
potential supply continuity issue?
With KPMG member firms in 144 countries, we have global
breadth and local-market knowledge of business conditions,
Does your entire supply chain function as one
and legal and regulatory requirements to help you work
5 virtual organization with everyone working with
the same information, processes, and metrics? toward your organization’s long term goals.
Contact
Amit Gupta Kevin O’Laughlin Rob Barrett Frank Kang
Principal Principal Managing Director Managing Director
Chicago Boston Phoenix McLean, VA
T: 847-274-4533 T: 617-988-1124 T: 650-814-0347 T: 703-286-8668
E: [email protected] E: [email protected] E: [email protected] E: [email protected]
© 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the
KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG
name, logo and “cutting through complexity” are registered trademarks or trademarks of
kpmg.com KPMG International. NDPPS 203548

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Demand Driven Supply Chains

If you could remove all of the information latency in your

Demand driven supply chains align

Becoming demand driven Key services

Key characteristics Factories 3 Days

• Product movements driven by actual demand/consumption OEMs

• Real-time demand/supply visibility across partner tiers

• Early identification of demand/supply continuity issues

• Single demand signal shared across partner tiers –

Sales Levels Expense Levels Inventory Levels

Do you have visibility to your total demand and

Are all material movements driven by actual

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