Stages of Transformation: The Demand-Driven Journey Begins With the End

M a y 2 0 0 7 A M R R e s e a r c h R e p o r t
All organizations are on a journey to transform
Stages of Transformation: traditional, forecast-based push supply chains into broader, end-to-end, demand-driven networks. The The Demand-Driven Journey change involves a strategic business project portfo-
Begins With the End lio to move the organization through four stages of maturity-from markets focused to value driven-each of which has business focus, IT, organizational, by Roddy Martin and the Extended Value Chain Strategies Team process, and performance management implications.© Copyright 2007 by AMR Research, Inc.
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This is printed on 100% post-consumer recycled fiber. It is manufactured entirely with wind-generated electricity and in accordance with a Forest Stewardship Council (FSC) pilot program that certifies products made with high percentages of post-consumer reclaimed materials.Stages of Transformation: The Demand-
Driven Journey Begins With the Endby Roddy Martin and the Extended Value Chain Strategies Team
The journey across multiple maturity stages, each with distinct business, IT, The and organizational characteristics, must be led by the executive level and Bottomfueled with a portfolio of strategically prioritized projects matched to the Linecompany and industry stage of maturity.
Organizations are transforming traditional supply chains into out-Executive side-in, demand-driven value networks that coordinate customer Summary demand (outside) back into the organization (in) to maximize customer value. But the journey is not the same for everyone. Each industry faces its own Moment of Truth challenges, dictated by what drives the industry, the industry-specific characteristics of demand, and the organization's state of readiness.
The goal of this Report is to map the journey companies are making to build demand-driven Value Chains. It includes a four-stage maturity model to guide companies through planning, identifying the projects and appropriate technology components needed to transition through each stage. Where possible and appropriate, we showcase best practices, company names, and vendors.
Report highlights
. Supply chains, demand-driven supply networks (DDSNs), and Value Chains are milestones on the demand-driven transformation journey.. Different and yet similar, demand-based Moments of Truth exist across industries.. Decisions and choices map to the four-stage maturity model that governs the jour-ney. Each stage links to the structure, maturity, culture, measurement philosophy, technology choices, and focus of the business.. 12 prioritized business projects, detailed by each of the AMR Research Value Chain Strategies analysts, are instrumental in creating the momentum toward creating a demand-driven Value Chain. The Value Chain Strategies research agenda, high-lighted in Appendix A, is based on this journey.
AMR Research Report | May 2007 © AMR Research, Inc. Beginning the journey
DDSN and Value Chain transformation strategies are not one size fits all. However, a common understanding of what it means to be demand driven and the corresponding business value for different industries is taking shape. Being able to accurately sense and translate actual demand into operations plans and processes, for example, and then communicate these to external partners in a structure organized for minimal waste and optimized working capital is valuable to any business.
The common business goal is to deliver profitable, perfect orders to customers that satisfy or create actual demand. This is how businesses prioritize... [download for more]