Demand Management in the Purchasing field means restricting requisitioners to using certain suppliers, ordering a certain way (such as over the web, rather than by phone or fax), and limiting the choices to contracted items. Inherent in the concept as demand management is being introduced and integrated is getting end user to realize that alternative products are equal to those they have already been buying.
Why is demand management necessary? First of all, nobody in the Procurement department wants maverick (buying down outside of Purchasing's control) spend. True demand management takes things a bit farther than that. If the concept is being fully executed, it means that users have been both consulted and advised about their spending habits. As one imagines, this is a delicate situation.
All the projected savings will quickly erode if users are allowed to slip back into their old habits. That's the crux of this discussion. Demand management is necessary to actually change users' wants. All the rules and systems, the fancy charts and savings numbers, and the nice write-ups in the corporate newsletter won't mean anything if the user base returns to the state it was in before the entire cost savings initiative was undertaken.
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