Company systems and processes need to enhance performance and the ability of a company to work in today’s VUCA (Volatile, Uncertain, Complex and Ambiguous) world. This VUCA world is challenging the supply chain operating models of companies around the world. Supply chains are elongating and become more fragmented while customer tolerance times are becoming shorter and shorter. Supply chain operating systems need to deliver the highest level of adaptability, agility and must be fully aligned to the needs of the market to enable a company’s performance to be enhanced.
In a recent Supply Chain Brain Think Tank discussion, they point to a need for supply chain leaders to drive the convergence of business, digital, and I.T. strategies. In the SupplyChainBrain article, the author goes on to say there needs to be a change if companies are to generate end-to-end demand driven supply chains.
Of the key points the author identifies, the following which fully supported by Demand Driven MRP (DDMRP) and the Demand Driven Operating Model (DDOM):
- Provide on-time, in-full (OTIF) delivery to customers and buyers every time
- Respond to sensed demand and buying signals
- Ensure that agreed-upon customer service levels are met
Demand Driven MRP is an emerging and disruptive technology that is continually sensing changes in demand and supply, adapting and aligning to the needs of the market. The ability of the company to provide OTIF is achieved through a methodology that will right-size inventory levels reducing shortages and eliminating excess levels. With supply order requirements being based on actual demand, orders communicated to suppliers will always be based on a standard lead time based on the demonstrated capability of the supplier. In doing so the overall performance of suppliers will increase. A significant percentage of current supplier performance problems are purely based on the miscommunication and changes that a company passes to their supplier.
Through a reduction in lead times, improved material availability, overall levels of customer service will be increased beyond expectations.
For information about supply chain optimization using DDMRP and how it will reduce your business risk read the following:
❯ Introduction to Demand Driven MRP (DDMRP)
❯ DDMRP Helps to Mitigate Business Risk
❯ Adapt or Die – Become Demand Driven
Contact us today so that your company can start to reduce risk before your competitor does!
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