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Introduction and challenges

Manufacturing organisations must deal with increasing product sophistication, more complex supply chains, higher demand volatility and growing uncertainty. DDMRP (demand driven materials requirements planning) has emerged as an approach to deal with these challenges. DDMRP offers a synthesis of prevailing operations management methods: Lean, Six Sigma, the Theory of Constraints, Material Requirements Planning, and Distribution Requirements Planning. It positions and sizes buffers throughout the supply chain, allowing dynamic parameter setting to bring shorter customer lead times and improve service levels, while optimising overall inventory.

A growing number of industry leaders have embraced the DDMRP approach and are deploying it at scale. It is now applied in industries such as luxury goods, chemicals, pharmaceuticals, fast moving consumer goods, and more. Furthermore, the approach has been enriched to address tactical planning through demand driven sales and operations planning, and detailed scheduling range through to demand-driven scheduling.

To ensure demand-driven planning drives value, companies need to understand the challenges they are facing and their suitability. This includes understanding the production environment best suited to their strategic goals – MTO (make to order), MTS (make to stock), or ATO (assemble to order), the specifics of their product flows, and the level of variability to which they are exposed. Then, to secure the success of their demand driven journey, leadership teams must prepare to change mindsets, performance targets, processes, and planning systems.

How we can help

With expertise in demand driven planning, Lean Six Sigma, as well as transformation, we help our clients to achieve sustained success through implementation of the demand driven planning approach, which typically involves:

  • Validation of the relevance of the approach: identification and qualification of the challenges, value stream mapping to support the positioning of decoupling and control points, precise evaluation of benefits (OTIF, lead-time, inventories) compared to actuals, and comparison with conventional MRP (material requirement planning) through our dynamic multi-level simulator with multiple scenarios based on different sets of parameters
  • Preparation of the pilot: compliant software selection thanks to our knowledge of leading demand driven planning packages, training of operational and management teams up to certification, and communication
  • Pilot: design of the demand driven model and business processes from tactical planning to detailed scheduling, change management, simulation of different sets of parameters through our advanced simulation capabilities, demand driven software parametrisation, software training, support to acceptance tests, implementation of indicators and dashboards to track adoption, demand driven model behaviour, and operational performance, post go-live support, monitoring of results, and return on experience
  • Roll-out: preparation of roll-out plan, definition of progress plans to improve performance further, including Lean and Six Sigma initiatives, and development of training programs