I asked Bruce Tompkins, Executive Director of the Supply Chain Consortium, to update readers on balancing supply and demand in the age of super-charged supply chains. Bruce is an expert in lean manufacturing, benchmarking and best practices, logistics, and being my younger brother (although he would sometimes like to omit this last credit.)

- Jim

Balancing supply and demand is a pretty interesting proposition, depending on who you are and what you do. It might also conjure up images of pain and suffering for those who are held responsible for actually achieving some kind of balance in their supply chains.

The idea that supply, which is now coming from almost anywhere in the world, and demand, which can be immensely variable week-to-week and day-to-day, could possibly be in sync leaves me amazed, amused and a bit confused. Here is what I know about where we are today on this issue, and of course, it raises a few more questions:

We have come a long way with technology to provide visibility into our suppliers’ plants, but is that enough?

There are increased activities within companies to improve relationships with all supply chain partners, and that’s great!

We have implemented better forecasting methods and tools to predict events and promotion impacts, but how much has that helped?

We have created demand signaling systems and repositories (DSR) and POS tools to get closer and closer to actual customer demand.

We have implemented VMI and other stocking and replenishment processes to tighten and close the loop.

New product introduction processes at many companies have been enhanced and the planning greatly improved to keep supply and demand better aligned as new products hit the market.

Many companies have reorganized and then reorganized again, trying to find the best way to make the supply/demand equation more effective.

The reality of the situation appears to be that we have unprecedented levels of variability in supply due to longer and more complex supply chains, and we have an economy that is creating unprecedented levels of variability in consumer demand. Wow, so this could be here to stay!

If you think I’m now going to give you the silver bullet that will make all of this go away and miraculously return your supply chain to the way it was in the good ol’ days, I’m sorry. There is no silver bullet. The path forward is to keep trying and trying and trying to take variability out of the supply side and demand side of the equation. Technology and tools are going to help, better processes and practices are essential, improved relationships are a must, and an organization that helps bring supply and demand closer is also key.

If you have insight into this topic, I would love to hear from you.