Demand Management for Sustainable Supply Chain Operations

Supply chain management (SCM) is about fulfilling demand. Based on given estimates of future demand, SCM invests the appropriate resources and then uses these resources to match supply to demand. The traditional SCM perspective takes demand as exogenous. The goal of SCM is then to serve the forecasted or materialized demand effectively and efficiently. How difficult it is to achieve this goal depends on the characteristics of that demand. For example, serving a stable, predictable demand is relatively cheap whereas serving an unpredictable, strongly fluctuating demand may imply less efficient operations characterized by high inventory built-up and low capacity utilization.

In the same way, demand characteristics impact not only the financial performance of the supply process but also its environmental impact. For example, satisfying demand for fresh produce during the harvesting season results in lower emissions than serving off-season demand which requires substantial storage and/or long-distance shipments from other growing regions.