Companies and analysts are increasingly adopting the term Demand Chain Management (DCM) when referring to the business processes and solutions that deal with managing demand, just as Supply Chain Management is concerned with managing supply. As such, DCM can be considered as the corollary to SCM, both of which are foundational elements of companies' value chains.

In defining Demand Chain Management processes, K3 employs plan, execute, monitor as a guiding principle. In plain English, this states that execution activities should be guided by careful planning, and that continual monitoring is necessary in order to take corrective measures when things don't go according to plan.

Demand Chain Management is a continual process encompassing all activities and processes related to marketing, selling, fulfilling, and servicing customers. Essentially, Demand Chain Management incorporates many important elements from sales and operations planning and proposes a more comprehensive approach to managing demand in order to meet corporate financial objectives. This includes managing the product portfolio, pricing and revenue management, demand creation, collaborative forecasting, allocations planning, quoting and availability, and reporting and analysis.

Initially, K3 has decided to focus on the processes in the demand chain that can yield the highest and quickest return. These areas are:

Product Marketing refers to all activities for launching, discontinuing, and changing product information focusing on typical responsibilities of the Product Manager role. So, the role manages all product and offering details, pricing, and product lifecycle information as well as decision support for product maintenance activities such as portfolio analysis, how to bundle products, brand level promotions, brand level forecasting, and revenue management. Initially, K3 has focused on maintaining product and pricing information to feed the sales process.

Sales and Operations Planning centers around how to sell the products defined in product marketing and how to further tune the sales forecasts by channel, contract pricing, and availability for the channel or category levels. So, creating a forecast based on input from internal sales teams, internal product teams, external sales channel partners, etc. Once the forecasts are finalized, then confirmation on product availability is returned and the full allocations are ready to be distributed to sales. Additionally, local promotions, budgets for those promotions, and sales channel partner contracts would be managed here.

Sales Execution focuses on executing against the sales plan through quoting, negotiating, placing orders, product suggestions, availability, order promising, product selection, approving quotes, viewing profitability of quotes, contract compliance and order status. The goal is to improve deal closure rates, decrease quote iterations, and increase transaction level profitability. So, it is necessary to provide sales agents and sales managers with the decision support tools to help them identify profitable deals and to negotiate new contracts. K3 felt this was the greatest area of immediate benefit for our market and has decided to focus most of our energy here.

Sales Monitoring encompasses monitoring and reporting on firm orders and open quotes, and tracking against the sales demand plan and financial plan. Based on the gap between forecasted sales and actual sales, this process determines the proper reaction to better align the demand plan in accordance with the actual demand. Adjusting the actual demand can occur through price adjustments and promotions, shifting allocations, bundling of products, etc. in order bring actual sales in line with the sales plan. Alternatively, one can maintain current sales activities unchanged and instead update the demand plan, propagate it to the supply chain, and then generate new product allocations. Additionally, it may be useful to monitor allocations and to expire forecast requests so that the availability can be re-allocated to other parts of the channel.

Each of these processes contributes to revenue generation and sales of products through direct sales or indirect sales channels. The processes are ongoing, in that products are continually being introduced and discontinued and the demand plans are constantly being tweaked according to sales attainment or visibility. The end goal is to achieve the corporate financial objectives through better planning and visibility of supply and demand signals and to utilize that information to create and fulfill the perfect order.