Demand-Driven Value Network

What Does Demand-Driven Value Network Mean?

A demand-driven value network (DDVN) is a business system that directs the overall activities of a supply chain in context or one that offers ultra-efficient sourcing for an enterprise.

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Techopedia Explains Demand-Driven Value Network

In general, digital tools such as a DDVN work on a broad-spectrum supply chain process to anticipate demand and source and deliver materials in a more efficient manner. This can lead to better customer service, less waste and more value for companies. For example, the concept of "just-in-time inventory" seeks to minimize inventory held in warehouses or stores by creating more dynamic processes for supply chain services.

With all of the benefits of a demand-driven value network, it would seem that businesses would flock to this sort of model; unfortunately, there are a number of hurdles and challenges that they need to face in adopting a DDVN model. Some are based around the implementation of these models, where a lot of re-training would be needed for the staff, and there could be a big capital investment up front. There is also the process of incentivizing DDVNs instead of just focusing on transactional sales like what so many businesses have done for so long. The amount of investment and commitment that is needed keeps many businesses from further exploring DDVNs as a viable model for renovating supply chain processes in a big way.

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Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.