A Different Take on the Disruptive Power of Integration

Loraine Lawson

Last week, my mother called me to ask if I'd drive 20 minutes to a store to pick up a popcorn popper for my father's Christmas present. This surprised me, because the retailer she mentioned has a branch within walking distance of my house. What's more -- she was calling me from that very retail store.


So why did I need to drive to a store 10 miles away, exactly?


It turned out, this was the fourth branch my mother had visited that day -- all in her quest to find this elusive popcorn popper. Apparently, all the area stores were out of the product, even though they'd advertised it just days before -- all except one store, which had exactly eight. After her fruitless hunt, she just couldn't face any more shopping.


Do you think my mother's happy with that store's customer service? Do you think she's thrilled with how well they've integrated their supply and demand functions?


It's Christmas, and that story is repeating itself over and over again all across the United States, if not the bulk of Europe, Canada and other places where Christmas is celebrated. That's a lot of unhappy customers.


I mention this because, apparently, there is a solution. It's called Demand and Supply Integration, and it's the focus of this piece from IndustryWeek.


Admittedly, the article is more about about business than technology -- though certainly technology plays a role - but I think it illustrates nicely the potential of technology integration and how it could revolutionize business, from customer satisfaction to warehouse distribution.


In other words, if you're involved in integration, particularly when it comes to supply chain or customer management integration, read this for a big-picture view on how integration can pay off.


And if you're a CIO, here's an IT/business alignment tip for you: Take the article to your CEO and share how technology integration can be used to similarly impact in your company.


Demand and Supply Integration is simply the integration of demand and supply systems -- with the information flowing both ways. This means you're using information not just to manage supply, but also to impact when and how the company markets products or services.


The article includes a great example of how this benefits Dell and its customers. Dell gave its customer service representatives access to both supply and demand information.


When a customer -- actually, one of the article's authors -- was told he couldn't receive the computer he'd ordered for two months, the Dell customer representative was able to tell him why -- the chip was on back order. The representative was also able to see that another, better chip -- at only $50 more -- was available and tell him if he upgraded, he could receive the computer in less than a week -- just in time for Christmas.


The author walked away happy and Dell made a sale. Now that's win-win.


Okay, sure. This process would work for Dell, which handles most both sides of supply and demand largely on its own. But what about a big retailer dealing with an outside suppler?


As it turns out, Lowe's uses Demand and Supply Integration with supplier Whirlpool to ensure enough products are stocked at Lowe's stores around the nation.


Sometimes, this means managing supply -- as when Whirlpool reroutes appliances to different stores or builds more -- but sometimes, it means managing demand -- as when Whirlpool can't give Lowe's more of a product, so Lowe's focuses its marketing tactics on "pushing" alternative products to customers.


Too bad Lowe's doesn't carry that popcorn maker my mom wants.

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