What Makes Demand Management in the Supply Chain Possible? a Multiple-Case Study of Critical Success Factors

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What Makes Demand Management in the Supply Chain Possible? a Multiple-Case Study of Critical Success Factors Gest. Prod., São Carlos, v. 23, n. 3, p. 570-587, 2016 http://dx.doi.org/10.1590/0104-530X2023-15 What makes demand management in the supply chain possible? A multiple-case study of critical success factors O que torna a gestão da demanda na cadeia de suprimentos possível? Um estudo multicaso dos fatores críticos de sucesso Daniela de Castro Melo1 Rosane Lúcia Chicarelli Alcântara2 Abstract: The objective of this study is to identify and analyze the critical success factors for improvement of demand management performance in the supply chain. This research adopted the multiple-case design, and the NVivo10 software was used to support content analysis. Forty interviews were conducted with senior executives of 27 companies including wholesalers, manufacturers, and retailers within the grocery sector. The following critical factors were identified: collaborative management (information sharing, planning and execution of joint actions, knowledge and resource sharing, and performance indicators), top management involvement, customer and supplier segmentation, information technology, and demand management adherence level. The results obtained can contribute to successful implementation of demand management process in the supply chain by providing a list of consolidated factors that can help professionals develop powerful strategies for effective demand management. Keywords: Demand management; Supply chain management; Critical success factors. Resumo: O objetivo deste artigo é identificar e analisar os fatores críticos de sucesso para a melhoria do desempenho do processo de gestão da demanda na cadeia de suprimentos. A pesquisa foi realizada por meio de múltiplos casos. Utilizou-se o software NVivo10 como apoio à análise de conteúdo dos dados. Foram realizadas 40 entrevistas com executivos de 27 empresas distribuídas em atacadistas, manufaturas e varejistas do setor de mercearia básica. A pesquisa possibilitou identificar os seguintes fatores críticos: gestão colaborativa (compartilhamento de informações, planejamento e execução de ações conjuntas, compartilhamento de recursos e conhecimento, indicadores de desempenho), envolvimento da alta gerência, segmentação de clientes e fornecedores, tecnologia da informação e nível de adesão à gestão da demanda. Os resultados da pesquisa podem auxiliar no sucesso da implementação do processo de gestão da demanda na cadeia de suprimentos, pois consolidam uma lista de fatores para que os profissionais possam concentrar seus esforços e desenvolver estratégias apropriadas para a melhor gestão da demanda. Palavras-chave: Gestão da demanda; Gestão da cadeia de suprimentos; Fatores críticos de sucesso. 1 Introduction Significant economic changes such as globalization of the suppliers. These changes have posed new have fostered market development, and thus companies challenges for organizations, requiring them to have been urged to offer greater product variety, identify customer value perceptions and how they customization, and higher service levels. In this can be transformed into product offerings. new context, demand management is a topic that Melo & Alcântara (2011) and Santos & D’Antone emerges in the field of supply chain management (2014) classify demand management into two and marketing seeking to balance and strategically approaches: demand management as the integration align demand with operating capability across of marketing and supply management and demand the supply chain through the rapid and successful management as a process or component of the supply integration of the market needs in the direction chain management. 1 Departamento de Engenharia de Produção, Universidade Federal do Triângulo Mineiro – UFTM, Avenida Doutor Randolfo Borges Júnior, 1250, Univerdecidade, CEP 38064-200, Uberaba, MG, Brazil, e-mail: [email protected] 2 Departamento de Engenharia de Produção, Universidade Federal de São Carlos – UFSCar, Rodovia Washington Luís, Km 235, CEP 13560-000, São Carlos, SP, Brazil, e-mail: [email protected] Received Feb. 2, 2015 - Accepted Aug. 15, 2015 Financial support: FAPEMIG. What makes demand management in the supply chain possible… 571 According to Melo & Alcântara (2012), demand synchronized with the company strategies, production management, marketing management, supply capacity, and final customer needs. management, and supply chain management operate According to Esper et al. (2010), the demand and together to build customer relationships, develop supply integration process begins with the recognition customer prioritization strategies, provide accurate that the organization has a set of strategies and tactics information to consumers, and establish intra- and related to the demand and supply management. inter-firm relationships or joint actions to balance Having access to this information, managers study value requirements and operational capabilities. the capabilities, constraints, and opportunities of Therefore, in order to maximize shareholder value, the external environment to generate demand and integration, coordination, and management of supply information (Esper et al., 2010). processes and of supply chain and demand activities The next step is the generation and dissemination are necessary (Anning et al., 2013). of knowledge of demand and supply processes Through systematic literature review (Anning et al., through forecasting. Thus, the representatives of 2013; Melo & Alcântara, 2011; Santos & D’Antone, these processes and representatives external to the 2014), it was found that there is little information company can share knowledge. The last element to provide guidance on how to implement demand of the structure proposed by Esper et al. (2010) is management in supply chains. Most studies available knowledge application, which takes the form of are focused on isolated demand management demand plans and operational plans. practices, such as demand forecasting, sales and According to Anning et al. (2013), the key operations planning (S&OP), collaborative planning, elements for the integration between the demand forecasting and replenishment (CPFR), and demand processes and supply processes are good relationships, segmentation (Melo & Alcântara, 2011, 2012). cooperation, and information sharing between the No research that focuses on supply chain agents supply chain agents. and addresses the critical success factors to implement Croxton et al. (2008) argue that the demand demand management across members of the supply management process requires the integration of strategic chain was identified. Thus, empirical evidence of sub-processes (provide structure for how the process any positive impact of demand management on will be implemented), operational sub-processes supply chain performance is scarce, and most studies (provide the detailed steps for implementation), available in the literature are theoretical (Bower, and the other supply chain management processes 2006; Milliken, 2008). (customer relationship management, customer service The objective of this study is to identify and management, order fulfillment, manufacturing flow analyze the critical success factors for improvement management, supplier relationship management, of demand management in the grocery supply product development and commercialization; returns chain including manufacturers, wholesalers, and management). retailers. Critical success factors are areas that Hilletofth et al. (2009) believe that there are three should receive special attention from organizations important issues that need to be properly addressed to to enhance the chances of successful implementation successfully implement demand management: demand of the demand management process in the supply generation, demand fulfillment, and coordination of chain. Therefore, they enable companies to get these two processes. Both marketing and supply chain organized and develop competences to reach demand management coordinate these processes according to management maturity to provide customers with market demands and require collaboration between better services and, with its proper implementation, the supply chain agents. Demand generation involves improve profitability. strategic marketing planning, marketing research, market segmentation, product development, product 2 Demand management and its commercialization, marketing and sales, and product life cycle management. On the other hand, demand critical success factors satisfaction consists of the strategic supply chain Many authors (Anning et al., 2013; Chong & planning, the supply chain design, and the supply Zhou, 2014; Croxton et al., 2008; Hilletofth & chain operations. Ericsson, 2007; Hilletofth et al., 2009; Juttner et al., Juttner et al. (2007) proposed three integrative 2007; Mentzer et al., 2007; Mentzer & Moon, 2005; themes for demand management: process, configuration, Rainbird, 2004; Vollmann et al., 2004; Walters, and social interactions. Demand processes include all 2006; Walters & Rainbird, 2004) assume that processes that involve the customers and the market demand management involves creating synergies aiming at meeting customer demand through value between operations and marketing management to creation. Supply processes comprise the tasks necessary better understand the market and develop actions for fulfilling demand. Thus, Juttner et al. (2007) 572 Melo, D. C. et al. Gest. Prod., São Carlos, v. 23, n. 3, p. 570-587, 2016 highlight the need for managing the integration Rexhausen et al. (2012) point out that an effective between demand and
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