Why switch to a demand-driven supply chain?

Demand Driven Institute - Position, Protect, Pull and Adapt

 

Well, have you every stayed awake at night thinking about how to both improve FLOW in your supply chain, and get everyone on the same page on the goal of customer satisfaction?

 

Here’s what Felipé Gonzalez, President at Acesco - Acerías de Colombia, discovered about becoming demand-driven:

 

"DDMRP not only offers a comprehensive methodology for improving the flow of operations (both finance and product), but has a powerful conceptual force to unite the entire organization around customer satisfaction."

 

That’s two reasons for becoming demand-driven, right there—in one sentence.

 

What do we mean by demand-driven?

We don’t mean becoming make-to-order. We also don’t mean trying Lean’s implementation of Kanban. And, we certainly don’t mean attempting to improve forecasting in vain attempts to align production with demand.

 

By becoming demand-driven, we mean demand-driven as articulated by Demand Driven Institute. You can read more about the concepts here.

 

But, there are many more reasons to consider switching to truly demand-driven.

 

How about simplifying planning and purchasing?

Tim Hendrickson, Executive VP of Operations at Saint Paul, Minnesota-based Wipaire, Inc. discovered that both rapid-deployment and quick results were possible with DDMRP (demand driven material requirements planning):

 

"We now manage 70 percent of our materials (by dollar-value) for manufacturing and customer service under DDMRP. We started our pilot program in April (of 2017), and have been fully implemented since mid-May. Our average lead time to our customer has been reduced 11 days to 2.2 days, while also realizing a three percent reduction in inventory investment."

 

Maybe you need to cut lead-times without sacrificing customer service levels

At ALBEA Group, that’s exactly what becoming demand-driven did for them. Vincent Thibault, Global Lean Director, reported:

 

"The Demand Driven Planner Program was a cornerstone of our lotion pumps business transformation. We now offer much shorter lead times (down by 75 percent) with 100 percent service."

 

Stop the expediting nightmares

Maybe what you would really like to do is stop the constant headaches and high expenses of expediting. Leila Bouhali, Supply Chain Manager, at Sames Kremlin found they could do just that very thing by moving to a truly demand-driven supply chain management approach:

 

“The Demand Driven Planner Program eradicated our stock-outs transforming us from constant expediting into on-time shipment. Everyday life is now much easier."

 

How about you?

Isn’t it time for your company and your supply chain to become demand-driven? You can. Companies around the world are doing it—from small businesses to huge enterprises like Michelin.

 

We can help.

 

Let us know what you’ve tried. What’s working and what’s not working. Leave your comment below, or feel free to contact us directly, if you prefer.

 

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Read full case studies from companies that moved to becoming demand driven using this link.

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