I interviewed Carol Ptak who discussed Update on DDMRP Acceptance in Africa.
It’s great to speak with you today, Carol. I’m looking forward to hearing your views today on the topic, which is actually an update on DDMRP acceptance in Africa. Before we start, can you provide a brief background of yourself?
Absolutely. Thank you, Dustin. I’m really happy to speak with you today too. My background is that I’m currently a partner with the Demand-Driven Institute. The Demand-Driven Institute is responsible for the development and maintenance of the demand-driven MRP methodology. Before that I worked for PeopleSoft. I was vice president and global industry executive there, where we came up with a concept and the name of demand-driven in 2003. Prior to that, I was with IBM. All that followed a career where I started on the shop floor at minimum wage in manufacturing and worked my way up to being a supervisor and manager, production-control manager, and running several companies around the country. I come up off the shop floor and worked my way up into some executive roles.
Thank you. My first question is: What is DDMRP?
DDMRP is what we call demand-driven material requirements planning. The name was picked when we were invited by McGraw-Hill to update, really, the bible of manufacturing, which was an MRP book that was written first in 1975 and then updated in 1992. DDMRP came about as a way to codify what was going on, as a way for a company to become demand-driven. How a company senses a gap to the changing marketplace around it but does it in such a way that we challenged a number of what we call great truths.
Great truths are things that absolutely everybody believes and they’re absolutely and unequivocally false. The great truths today include things like: To have better customer service, I have to have higher inventory. This is the basis of all the inventory models, inventory optimization models, and that is absolutely false. What DDMRP does is a way to be able to reduce lead time, absorb incredible amounts of supply chain variability and volatility, and improve return on capital employed all at the same time and all without compromise.
What is your involvement with DDMRP in Africa?
This is really exciting. I had the opportunity to be invited down there. I actually went down in June for the first time to first take the message of DDMRP to Africa. The acceptance was so overwhelming. We had scheduled a seminar down there, and we figured we’d book a room about double what we thought we would need, and we ended up, that room was absolutely full, with a waiting list. They invited me back down in August, and I’ve just returned from Africa.
The acceptance down there is absolutely incredible. What people don’t realize is that African economy is the fastest-growing economy on the face of the planet. Everybody’s focused on China and India, and the reality is: Africa is the place to be. It has got the youngest on average population, it is the fastest-growing economy, and, what’s news to me, 60 percent of the arable land in the world is in Africa.
Here’s this powerhouse that’s coming up online, and they were very receptive to this message and saying, “How do I sense and adapt? How can I see what my customer really wants? How do I adapt to my supply chain so that I can service that need in a profitable manner, in a way that’s sustainably profitable, not just looking at short-term profits where I sacrifice something in the future, but something where I’ve got improved return on capital employed ongoing?” I had the opportunity to visit with companies that made everything from consumer goods—they made wine and liquor and that kind of thing—to companies that were making canned goods and things directly from the farm to the consumer. I met with people who were everywhere in between that, from construction, I got an opportunity to meet with the folks who do the trains in Africa.
South Africa actually does a lot of the trains, the remanufacturing of trains for all of southern Africa. From this idea of maintenance, repair, overhaul, new construction, the receipt of the message was the same. They were like, “We get this; we understand this. This is something that we absolutely need to do here in Africa so that it will really help our economy grow with the potential that it has.” It’s already growing. They’re seeing a lot of extra demand down there that they’ve never seen before. How do they manage that? Especially given that a lot of the raw materials currently come in from South America, Europe, and the United States. They’ve got long lead times coming in, but the customers are expecting very, very short lead times as they deliver product. The receipt of the message was absolutely overwhelming. It has been the country that has accepted the message the most quickly. I was very surprised the first time I was down there, and it just reaffirmed it the last trip I was there.
How is DDMRP developing in Africa?
DDMRP is really developing in Africa with several pilot projects that are going on down there, from companies that are steel manufacturing, to other companies that manufacture construction chemicals. They’re doing several pilots down there; there are several software companies that are actually down there working on the DDMRP software solutions, to become DDMRP-compliant. We have a number of them in the workshops.
A lot of activity going on down there to get the pilots going, to prove that it works for them down there, and to have the necessary infrastructure that they have down there for education and training, as well as the technology and the implementation teams to support this as it’s rolling out. Like I said, for a country, South Africa has really jumped on this bandwagon and is aggressively moving forward. Our affiliate down there, which is SAPICS, is covering all over sub-Saharan Africa, and they’ve got alliances with instructors who are French-speaking, to be able to get in to the western African countries, as well as taking the message up to Mozambique and up into Africa.
They’ve got a very aggressive schedule moving forward. I think they’ve schedule already six sessions coming up in just the next few months of being able to get that education out there.
Thank you, Carol, for sharing your update on DDMRP acceptance in Africa.
Thank you very much. It was very exciting to me. I was really surprised. I really did not expect that when I went down there, and I really didn’t expect what I learned about the African economy. There’s just so much in the news and media today about Ebola and all this, and they treat Africa like it’s a third-world country, continent, and it’s really not. You get into areas like South Africa, and you get up into some of the other countries that are down there; very safe, very growing, a lot of very healthy economics.
The dollar to South African rand is very, very favorable right now. Yeah, I was very excited that you wanted to talk about that today, because I was surprised, and I thought maybe some of your readers might be as surprised at how healthy that economy is down there. People shouldn’t miss it. Africa’s really the place to invest right now. I know we’re definitely positioning some more investments down there.
Well, I look forward to future updates regarding Africa as well, so feel free if you have more things to share.
Absolutely. Love it.
About Carol Ptak
Partner at Demand Driven Institute LLC