An article by Lora Cecere appearing on the Supply Chain Shaman website offers this warning:

 

Disruption in supply chain planning is happening. My angst is that it is not happening faster. We are on a path to reinvent decision-support technologies like supply chain planning. The third act is starting. This will make traditional approaches obsolete. The rate of adoption will be fast for early adopters (next five years), but much slower for conservative followers. The barrier for all is traditional thinking.

 

ChangeIsInevitable.jpg

What we think we know

 

Think back over the course of history.

 

It doesn’t really matter what history. It could be your personal history. It could be the history of your company. Perhaps, it could your history in managing supply chains. You could even look back at the history of any nation, or culture.

 

No matter where you look, I believe that—if you’re honest—you’ll be able to recognize a problem. One might even safely label it a “danger.”

It is almost always what we think we know that becomes…

The anchor that holds us back from making great progress; andThe causes of most of our great failings.

 

It was what Napoleon thought he knew about defeating the Russians that caused him to lose more than 400,000 men on his tragic march to and retreat from Moscow.

 

It was what people thought they knew about the earth that kept them—for centuries—from traversing the globe and discovering new lands and the wealth that could be gained from creating “supply chains” between the Old World and these newly discovered lands.

 

It's what we think we know—what Lora Cecere refers to as “traditional thinking”—that is our biggest barrier to achieving great things.

 

Some have broken through—and broken away from the pack

Cecere offers cogent warnings that ought to be considered. The coming changes “will make traditional approaches obsolete.” Further, she accurately declares, “The rate of adoption will be fast for early adopters…, but much slower for conservative followers.”

 

So, let’s take a look at what some “early adopters” are saying about demand-driven material requirements planning (DDMRP) and demand-driven sales and operations planning (DDSOP):

Unite the entire organization [2]

"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." -- Felipe Gonzalez, President, Acerias de Colombia - ACESCO

Short lead time and 100% service

Demand driven planning “was a cornerstone of our lotion pumps business transformation. We now offer much shorter lead times (down by 75 percent) with 100 percent service." -- Vincent Thibault, Global Lean Director, ALBEA Group

Big wins for a distribution network

After implementing demand-driven planning “methods, …backorders as a percent of sales dropped from 16.3 percent to 1.1 percent with a 54 percent inventory reduction. It works." -- Steven Montgomery, General Manager: Supply Chain & Projects, a.b.e.s Construction Chemicals (PTY) LTD

We won a supply chain award!

"The Demand Driven planner program led us to completely overhaul our planning processes. The results were great and we won the 2015 King of Supply Chain Competition!' -- Laurent Vigouroux, VP Quality, Bernard Controls Group

On-time deliveries and low stocks: we did it!

“The Demand Driven Planner Program eradicated our stock-outs transforming us from constant expediting into on-time shipment. Everyday life is now much easier." -- Leila Bouhali, Supply Chain Manager, SAMES KREMLIN

High visibility

"With DDMRP we have nearly eliminated expedites, inventory down is 25 percent in four months, and we have no stock-outs." -- Fernando plaza, Manager, IFAM

We transformed a supply chain

"l was able to take the [demand driven planning] concepts… and leverage them with our suppliers and customers for better flow through the entire chain." -- Lindsey Fountain, Supply Chain Manager, Rex Materials Group

Strongly recommended!!!

"Demand driven [planning] provides a very disruptive approach to deal with the uncertainty, reducing financial risks and increasing service level. Strongly recommended!!!." -- Jaime Hernandez, Supply Chain Manager, Industrias Haceb

 

Where is the brilliance of demand driven planning?

The brilliance and effectiveness found in demand driven planning comes, not from attempting to make forecasts more accurate, but from applying forecasting where it makes the most sense—for longer-term capacity management decisions and for scaling short-term adjustments to dynamically-managed and strategically-placed buffers. The buffers themselves are strategically placed and sized in order to decouple variability on both the upstream and downstream sides of the supply chain.

 

Sound. Proven. Effective.

 

What’s hold you back? We would be delighted for you to join the conversation by leaving your comments below. However, if you prefer, you may contact us directly.

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NOTES:

[1] Cecere, Lora. "Different Strokes for Different Folks (to Yield Better Results?)?" Supply Chain Shaman. February 10, 2017. Accessed February 13, 2017. http://www.supplychainshaman.com/uncategorized/different-strokes-for-different-folks-to-yield-better-results/.

[2] All quotes from "The Demand Driven Institute - World Leader in Demand Driven Education." The Demand Driven Institute. Accessed February 09, 2017. http://www.demanddriveninstitute.com/.

 

 

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