The role of demand management in achieving supply chain agility

Abstract

Purpose – The purpose of this paper is to explore the role of demand management in achieving supply chain agility (SCA) through a multi-disciplinary review of the relevant research. The systematic literature review provides the basis for formulating a conceptual framework of the relationship. Design/methodology/approach – A systematic, comprehensive review of the literature on manufacturing, marketing organizational and SCA from 1991 through 2013 was conducted. The literature on demand management is also examined to identify the various elements that contribute to SCA. Findings – Most agility frameworks take a supply-side perspective and assume that demand is known. Those that do acknowledge the role of demand fall short of offering a holistic framework that acknowledges the role of both. This paper suggests that it is simply not enough to have flexible manufacturing, distribution and procurement systems to achieve SCA. Flexibility in managing demand is also needed. Furthermore, it is the premise of this paper that demand and supply integration (DSI) inside the firm is critical to achieving SCA. Research limitations/implications – This research is a systematic, integrative review of the existing literature on the concept of agility. As such, the next phase of research needed for theory building will be the operationalization of constructs and testing of the hypothesized relationships proposed by the conceptual framework. Practical implications – The paper has several managerial implications as well. It illustrates how firms can create and sustain competitive advantages in turbulent environments. Managers can use the framework developed here to assess what structures and decision-making processes they can use to increase the firm’s SCA. Practitioners can use this model as a checklist to identify candidate areas for improving agility. The section illustrating the use of knowledge management to increase DSI should be of particular interest to managers, considering that a great deal of firms experience a disconnect between demand creation and supply fulfillment. Originality/value – Through a systematic, comprehensive review of multi-disciplinary literature, the paper explores the role of demand management in achieving SCA.

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