6 Keys to a Successful DDMRP Supply Chain Transformation

By Bernard Milian

DDMRP implementation has long been the domain of experimentation, pilots and deployments of limited scope. With a few exceptions, small and medium-sized enterprises, with faster decision-making processes, were the first a few years ago to adopt the methodology, as well as isolated sites of larger companies.

Over the past two to three years, a new type of project has emerged, with world-class groups adopting and deploying the Demand Driven Adaptive Enterprise model on a large scale, end to end, at dozens of plants and distribution sites.

We have the privilege of supporting several projects of this type – which generate a particular level of demand on our solutions and services. We see similarities in these large-scale projects, which we will share with you in this post.

What are the common success factors for these projects?

Leadership

It’s a cliché but to be successful, any organizational transformation must be fully supported by the group’s leadership team.

What we’ve seen with DDMRP supply chain transformations is more specific than that. For every successful project, without exception, there is a man or a woman who embodies the subject, over a long period of time, with passion, perseverance and a deep focus on achieving the expected benefits… Eric, Thibaut, John, François, Barry to name a few of the ones we know.

These sponsors began by exploring the methodology, experimenting and understanding why it is well-suited to their company. Working closely with the management committee, they undertook a process of conviction to engage the company, sometimes putting themselves at risk within the organization. They took this path over a long period of time, often several years, without letting go.

The profiles of these leaders are similar from one company to another: impertinence to challenge the status quo, political skill to navigate the complexity of the organization, recognized legitimacy, stability to lead the process over several years.

Success factor n°1: a passionate person at the head of the process!

An Obsession for Results

In the early days of DDMRP, we saw several companies test the method “out of curiosity.” Many of them remained at a preliminary stage. They had not really used the approach to address strategic issues.

Companies that succeed in their supply chain transformations have real problems to solve, problems that have a strategic impact. “We can no longer manage the complexity of our product lines,” “Our service is very inadequate and must improve by 10% within a year,” “We must reduce our lead times by 50% to penetrate these new markets,” “We must reduce our inventory by 20% to finance our growth” or “The productivity of our plants is seriously affected by production disruptions and changes in production plans.”

From the start of the project, these companies implement key performance indicators to monitor progress, breaking them down by site, reviewing them at each operations review, encouraging continuous improvement efforts, celebrating successes, etc.

Monitoring the inventory balance towards more green status parts

In contrast to large ERP projects, where the main criterion for success is all too often a go live happening without too much damage, a Demand Driven transformation must deliver tangible results, quickly and sustainably.

Success factor n°2: passion for results!

A Small Internal Deployment Team

Group-wide deployment is driven by a small central team—on the order of 5 – 6 full-time members for global companies with dozens of industrial sites. This small team establishes an enterprise-specific DDMRP “blueprint” at the first pilot sites, which is then deployed on a site-by-site basis.

This adaptation of the model establishes common rules: the structure of the buffer profiles, piloting rituals, performance indicators, etc.

On each site deployed, a key correspondent and the site manager act as relays to the group deployment team.

Each company appropriates the model and, unlike during ERP projects, there are no armies of support consultants. The Demand Driven expert consultants are involved in the initial phases, and then provide expert support on specific issues. They are also involved in auditing or providing ad hoc guidance, because the methodology and tools are progressing rapidly, enriched by the experience of a constantly growing community of practitioners.

Change management is key, and therefore … it is not delegated to external parties: it is the internal team and the management team that assumes it, with the support of available methods, training and tools.

The Demand Driven Institute and its partner organizations have developed a set of awareness and training formats that facilitate the involvement of different audiences within the company.

Success factor n°3: an internally driven transformation!

An Agile Project Metholody

Pilot projects are conceived not as a limited experimentation, but as a first phase of deployment:

  • The company’s main business cases are covered by the pilots
  • The pilots are large, often on a factory scale
  • The means are put in place to make it a success: managerial attention, resources, a robust, scalable IT tool integrated with the ERP
  • The post-pilot suite is organized from the outset: budgets are pre-approved, the project team is approached, the IT strategy is validated, etc.

Deployment is done without looking for perfection and thinking too long before acting. We deploy, measure and adapt, in agile mode.

The deployment timing is often aggressive after the definition of the blueprint, for example with the start-up of one plant per month, and the sequence of training / design / rehearsal / go live / improvement at regular intervals.

Success factor n°4: an industrialized and adaptive project methodology!

Focus, Coherence and Perseverance

Deploying a large-scale supply chain transformation requires aligning very disparate, multi-functional, multi-cultural and geographically dispersed teams with a common vision and understanding.

These teams within the company have pre-existing modes of operation, processes, rituals and beliefs. The training materials developed by the Demand Driven Institute facilitate the establishment of this shared vision, which is often at odds with what already exists.

While promoting an ambitious vision (a BHAG, or “Big Hairy Audacious Goal”), our companies engaged in these global transformations adopt a pragmatic, step-by-step approach, without confronting existing models from the outset.

The Demand Driven tactics are integrated into the existing rituals of the company, and these gradually evolve under the influence of the results obtained and the evolution of mentalities.

For example, the S&OP process is progressively linked to the mechanics of the operating model, buffers’ performance measures are taken into account to feed it, inventories, procurement and production plans, load/capacity are projected and support several demand scenarios, and S&OP progressively evolves as an adaptation process.

In the same way, production planning in the workshop evolves step by step towards a complete DDOM model, with scheduling of control points, adoption of time buffers, etc. For companies with advanced Lean practices, this approach is very consistent and natural, and allows to digitize and complement existing management modes.

To succeed in this process requires an approach without dogmatism, accepting compromises and imperfections, to let minds mature while remaining focused on what is important and on the systemic vision.

Success factor n°5: a pragmatic, progressive and determined approach!

Intuitive and Adaptive Software Solutions

The IT solutions adopted facilitate a successful deployment by being easy to access for all users, fully integrated with the ERPs in place, and scalable.

This scalability is not only about the ability of the solutions to establish a cloud platform encompassing all the company’s sites, but also about the functional coverage enabling the integration of the Demand Driven processes from S&OP through to scheduling and execution monitoring on the shop floor.

Success factor n°6: an intuitive and scalable suite of Demand Driven solutions Do not hesitate to contact us to prepare your projects…

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