Order Promising and Demand Shaping in a Segmented, Omni-Channel World

In a segmented, omni-channel world, available-to-promise (ATP) is seeing a renaissance. Omni-channel profitability for retailers and other value chain participants will increasingly depend on a matrix of available-to-promise possibilities across the various supply chain entities that make, move, and store inventory. As retailers evolve their omni-channel strategies, order promising, along with sophisticated demand shaping capabilities, will become central to profitable fulfillment decision making. Companies will have visibility to an increasing number of fulfillment options and their associated profitability profiles and provide on-the-spot offers to shape demand in a way that is advantageous to both the customer and the company. These concepts have become central to emerging business models such as jet.com.

Almost 20 years ago, JDA was a pioneer in bringing to market allocated available-to-promise (ATP) capabilities to support segmentation across geography, product, and customer. These capabilities were deployed by dozens of sophisticated supply chain practitioners that needed differentiated customer responses and associated inventory management. JDA was awarded a number of patents in this area and these became instantiated in today’s JDA Order Promiser product. I have written in the past about how this multi-dimensional ATP capability supports supply chain segmentation for manufacturers (see Supply Chain Quarterly).

These capabilities also augured the introduction of sophisticated demand shaping capabilities. With Order Promiser, manufacturers and brand owners could instantly offer alternative configurations to customers when the desired configuration was not available within the customer’s desired lead time. This capability was particularly powerful for high tech manufacturers, whose inventory value decreased on average one half of one percent per week. These industries operated high velocity business models as a matter of survival; inventory turns and the associated cash-to-cash cycle were critical. Visibility to back-end material shortages and excesses were critical to making intelligent demand shaping offers on the front end of the supply chain. In these industries and business models, capabilities such as those available in Order Promiser were not a luxury; they were a matter of survival.

Now, let’s fast forward to 2015. What business model today does not have high velocity as prerequisite? What omni-channel strategy could not use such capabilities in making intelligent decisions on the source of supply for a given customer order line item? The prevailing overarching message associated with supply chains today is customer centricity. This means a personalized fulfillment response to each individual customer (whether in B2B or B2C) that is consistent with the needs of the customer and the profit motives of the enterprise. Supply chains are evolving towards segments of one, as I discussed in “Say Hello to the Selfie Supply Chain.” Sophisticated order promising, along with demand shaping may well be two significant ingredients necessary for companies to achieve profitability on their eCommerce sales.

Personalized, differentiated customer experience is a key driver for JDA’s solution direction. The latest release of JDA Order Promiser is the next evolution of this commitment.

I welcome your comments and feedback.

  1 Comment   Comment

  1. Very well stated. Or as I like to say, all that is old is new again.

    We live in the era of Mass customization for an audience of One.

    Supply Chain Management will be critical going forward!

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