Harmonizing Intuition and Data in Supply Chain Management
Explore how combining intuition and data-driven approaches can enhance supply chain management in complex environments for faster, more effective...
Discover how DDMRP can enhance agility and efficiency for SMEs, offering quick, tangible benefits without the need for mature MRP systems.
Small and medium-sized enterprises, or SMEs, are an essential component of the industrial and commercial dynamism of the global economy. The first characteristic of successful SMEs is agility: they rely on tight teams, interactions between industrial, technical, and commercial functions are permanent, and the silos are less compartmentalized than in many large groups.
It is not surprising, therefore, that from the early days of the DDMRP’s dissemination, some small and medium enterprises have been pioneers.
One example is the company Peugeot Saveurs, a French manufacturer of spice mills sold worldwide. It is a company with about 150 employees. Following the training of 3 members of the management committee in May 2015, the decision was immediately taken to implement DDMRP with Replenishment+, for a go-live within 3 months. This is the speed at which an SME is able to go, whereas embarking a large group or even a single entity of a large group can sometimes take several years.
However, for an SME to make the leap, the interest must be clear to key decision-makers. DDMRP, DDOM, DDS&OP, DDAE, complex adaptive systems, cash velocity or adaptive S&OP are jargon that does not hit the nail on the head. Regardless of their curiosity for new concepts, the management team of an SME is focused on its customers and suppliers, its product and service offering, its current operational concerns. It is looking for concrete, pragmatic, efficient, and, if possible, quick-to-implement solutions.
The capacity for investment and attention is constrained, the right priorities must be chosen. Many of these companies have a strong culture of customer service, but a limited culture regarding Supply Chain management practices. They have often been overwhelmed by the implementation of their ERP, which has monopolized many resources without necessarily providing the expected service. Trusting in a new miracle formula with a nice SD-labeled software is not self-evident.
On the other hand, pilot the activity by the real demand—no problem, we understand, that’s what we try to do from day to day!
What are the problems that the Demand Driven approach can solve in a SME context?
For many SMEs, especially industrial ones, it is not uncommon to find that planning intelligence—order management, manufacturing, procurement—is actually in the heads of a few key people. They know what is possible and what is not. Over the years, they have developed an in-house logic for planning, backed up by Access databases and Excel files, with information extracted from the ERP and reworked. It works, sometimes hard, but it’s fragile.
Often a culture of everyday heroes has also developed. The teams are focused on serving the customer at all costs, with friendly pressure from a very present sales team (we have known sales managers who go into the workshop to manage priorities, right?, and after a while we are in continuous crisis and emergency management in firefighter mode.
When the environment is increasingly uncertain, as is the case for many companies, especially with crises exacerbated by Covid-19 or Brexit, there is a strong risk that the company will find itself in complicated situations and not have the right stocks at the right time.
Lean has gradually made its nest in most small and medium-sized industrial companies, particularly in terms of quality, organization, structuring and simplification of processes. 5S, short interval animation, problem solving, facilitation of continuous improvement have become anchored in daily practice.
However, the pull flow, in the form of kanban variants, is still in the minority for a variety of reasons, whether it’s lack of knowledge or confidence to implement these practices or the inability of the company’s ERP system to easily support them. Most SMEs try to plan in a conventional way, based on forecasts, more or less smooth and fixed PDPs, material requirements calculations and safety stocks.
As for the practices of the theory of constraints, they are very much in the minority because very little is known in this segment of the industry.
However, because of their dynamism and their permanent need to adapt, SMEs are eager for new practices and there is less resistance to change than in large structures. The success of a DDMRP implementation is therefore within reach for those who are committed to it.
“DDMRP sounds good, but we probably don’t have the necessary maturity, we first need to master our MRP and improve the reliability of our forecasts!”
We have heard this questioning very often. However, there are many examples that demonstrate that:
Let’s be clear: no, you don’t need a mature MRP to embark on the road to the DDMRP. On the contrary!
If you have already set up kanbans or order points to manage your stocks, you will be able to facilitate their management thanks to the DDMRP dynamic buffers mechanism, which will be very natural to adopt.
The management of a Demand Driven project is now well established, and can be done remotely without any problem within the current health constraints:
In just 3 to 6 months you will be able to benefit from a simple and efficient process in which:
The many SMEs that have committed themselves to the approach testify. Do not hesitate to meet them to make your opinion:
DD Tech teams are at your service for any information request!
If you are a SMB looking for a DDMRP compliant ERP cloud solution do not hesitate to explore our Replenishment+ solution for NetSuite.
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