| A | For the sake of argument, let's just drop the word, "supply" from the chain and remove the image of chevrons moving from left to right to embody the supply chain process flow being driven by a bill of materials (BOM).
It's 2005, and yes, companies still at some point in the manufacture-to-deliver effort must move through that chain of events. However, the major shift, arguably accelerated by the collaborative capabilities of the Internet, is that customers are no longer willing to simply buy the products that they don't want (go ask one of the automobile OEMs if you don't believe me), and that manufacturers have figured out that sitting on stockpiles of unnecessary inventory eats into margin.
Further, and this is where the "demand" aspect becomes more prominent, companies are also figuring out that it's just as bad to have stock-outs, or the wrong products in the wrong market at the wrong time (like SUVs when gas is at $2.50/gallon).
Clearly, with intense competition for customers and raw materials, companies can be capsized by even mildly wrong planning assumptions. The answer: Know what your customers demand and deliver it to them the way they want it, when they want it, at a price they are willing to pay. So, the concept is more of a demand-driven value network, rather than a uni-directional chain. Achieving such an ecosystem is a hugely challenging proposition, which calls for the collaboration of customers, product design groups and suppliers, and it assumes air-tight communication and process activities. And it's not going to happen over night. But, it sure beats having a year's worth of inventory sitting out in the parking lot.
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