Customer‐facing supply chain practices—The impact of demand and distribution management on supply chain success
| DOI | http://doi.org/10.1016/j.jom.2012.02.001 |
| Date | 01 May 2012 |
| Published date | 01 May 2012 |
| Author | Richard Pibernik,Gernot Kaiser,Daniel Rexhausen |
Journal
of
Operations
Management
30
(2012)
269–281
Contents
lists
available
at
SciVerse
ScienceDirect
Journal
of
Operations
Management
jo
ur
nal
home
page:
www.elsevier.com/locate/jom
Customer-facing
supply
chain
practices—The
impact
of
demand
and
distribution
management
on
supply
chain
success
Daniel
Rexhausena,∗,
Richard
Pibernikb,c,
Gernot
Kaiserd
aEBS
Business
School,
Department
of
Supply
Chain
Management
&
Information
Systems,
Konrad-Adenauer-Ring
15,
65187
Wiesbaden,
Germany
bJulius-Maximilians
University
Würzburg,
Chair
of
Logistics
and
Quantitative
Methods,
Sanderring
2,
97070
Würzburg,
Germany
cZaragoza
Logistics
Center,
C/
Bari
55,
Edificio
Náyade
5,
50197
Zaragoza,
Spain
dTechnical
University
Darmstadt,
Department
of
Law
&
Economics,
Hochschulstraße
1,
64289
Darmstadt,
Germany
a
r
t
i
c
l
e
i
n
f
o
Article
history:
Received
13
December
2009
Received
in
revised
form
23
January
2012
Accepted
1
February
2012
Available
online
10
February
2012
Keywords:
Supply
chain
performance
Supply
chain
management
practices
Demand
management
Distribution
management
Survey
research
a
b
s
t
r
a
c
t
Traditionally,
distribution
has
been
viewed
as
the
key
(physical)
link
between
a
company’s
internal
supply
chain
activities
and
its
customers.
More
recently,
demand
management
has
emerged
as
a
new
dimension
at
the
customer
interface.
Although
it
has
become
increasing
popular
in
industry,
it
has
not
yet
been
ana-
lyzed
in
depth
with
respect
to
its
impact
on
supply
chain
performance.
Both
distribution
management
and
demand
management
entail
customer-facing
processes
and
practices
and
that
are
interrelated
and
(may)
jointly
determine
supply
chain
performance.
In
this
paper
we
seek
to
extend
the
stream
of
research
in
supply
chain
management
by
systematically
investigating
the
impact
of
customer-facing
supply
chain
practices
on
supply
chain
performance.
Specifically,
the
paper
examines
the
relative
impact
of
relevant
practices
associated
with
demand
and
distribution
management.
To
this
end,
we
collected
data
from
116
multi-national
companies
based
in
Europe
and
analyzed
it
using
structural
equation
modeling
techniques.
Our
results
suggest
that
(i)
high
demand
management
performance
has
a
substantial
positive
impact
on
the
overall
supply
chain
performance,
(ii)
this
effect
is
stronger
than
that
of
distribution
management
performance,
and
(iii)
there
is
no
evidence
that
demand
management
might
be
an
enabler
for
effective
distribution
management.
Among
the
individual
practices
that
constitute
demand
and
distribution
man-
agement,
adherence
to
the
demand
and
distribution
management
processes
and
demand
segmentation
emerged
as
the
strongest
performance
levers.
Based
upon
additional
in-depth
interviews
conducted
with
selected
companies
from
our
sample,
we
shed
light
on
some
of
the
most
important
findings
that
emerged
from
our
survey
analysis.
©
2012
Elsevier
B.V.
All
rights
reserved.
1.
Introduction
The
past
two
decades
have
witnessed
a
fast-growing
interest
of
practitioners
and
researchers
alike
in
supply
chain
management’s
contribution
to
corporate
success.
Today,
there
is
a
substan-
tial
amount
of
empirical
evidence
on
the
relative
importance
of
traditional
SCM
practices
and
dimensions
such
as
purchasing,
man-
ufacturing,
and
distribution
management
(Narasimhan
and
Das,
2001;
Mentzer
et
al.,
2008).
One
comparably
new
SCM
dimension
that
has
become
increasingly
popular
in
industry,
but
has
not
yet
been
extensively
analyzed
in
academic
literature
with
respect
to
its
impact
on
supply
chain
performance,
is
demand
management
(DeM).
In
its
broadest
sense,
DeM
can
be
interpreted
as
the
ability
of
a
company
to
understand
customer
demand
and
requirements
and
balance
them
against
the
capabilities
of
the
supply
chain
(Lambert
∗Corresponding
author.
Tel.:
+49
611
7102
2100.
E-mail
address:
daniel.rexhausen@ebs.edu
(D.
Rexhausen).
and
Cooper,
2000;
Croxton
et
al.,
2002).
While
traditionally,
DeM
has
been
understood
as
“demand
forecasting”,
a
number
of
new
practices
have
been
identified
that
constitute
the
DeM
dimension.
Examples
of
such
practices
include
customer
and
product
segmen-
tation
as
well
as
integrated
sales
and
operations
planning
(S&OP)
(Grimson
and
Pyke,
2007;
Lapide,
2008).
Anecdotal
evidence
from
industry
demonstrates
the
tremen-
dous
impact
that
good
DeM
–
or
a
lack
of
it
–
may
have
on
company
performance.
Probably
the
most
prominent
case
is
network
titan
Cisco
Systems,
who
in
2001s
economic
downturn
failed
to
antici-
pate
the
decline
in
demand
due
to
a
lack
of
demand
and
inventory
visibility.
As
a
consequence,
Cisco
had
to
write
off
USD
2.2
billion
inventory
and
cut
staff
by
18%
(Byrne
and
Elgin,
2002).
An
exam-
ple
demonstrating
the
positive
business
impact
of
DeM
is
the
flash
memory
producer
SanDisk.
By
implementing
a
company-wide
DeM
process,
SanDisk
within
just
one
year
was
able
to
increase
revenues
by
almost
50%
with
at
the
same
time
30%
more
on-time
deliver-
ies
and
20%
better
inventory
turns
(Paganini
and
Kenny,
2007).
However,
evidence
of
the
relevance
and
impact
of
DeM
is
more
of
0272-6963/$
–
see
front
matter
©
2012
Elsevier
B.V.
All
rights
reserved.
doi:10.1016/j.jom.2012.02.001
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