SAP

Management teams at high-tech companies often find themselves caught between customer demands and production, supply, and logistical constraints. The consequences of such a dilemma can include lost sales, delivery failures, excess or low inventory, and frustrated customers.

To address this conflict, high-tech companies must work toward integrating the supply and demand sides of their businesses. The foundation of such integration is a demand-driven supply network (DDSN) that can efficiently react to changing market conditions. At the pinnacle of DDSN maturity lies the concept of demand shaping. Demand shaping involves adjusting customer-facing activities such as sales, marketing, and pricing, as well as making these decisions with full visibility into product development, supply, manufacturing, and distribution constraints.

This paper focuses on the market conditions that drive the need for demand shaping in the high-tech industry, describes the evolutionary process of DDSN and demand shaping, and illustrates through several demand-shaping scenarios how high-tech companies can use the approach to their benefit.