A recurring question is: what are the prerequisites for deploying Demand Driven tactics in the supply chain?
Will it work with our ERP?
Does this apply to our company?
Do we first need to get a better grip on our MRP?
I’ve heard this provocative answer from Carol Ptak several times: if you don’t have variability, you don’t need Demand Driven tactics…
Prerequisite 1: variability
– easy to tick!
A second prerequisite comes rather quickly. While it’s possible to run DDMRP buffers, kanbans, conwip or drum-buffer-rope logic with physical labels and boards, if you really want to deploy modern tactics to develop the agility of your operations, you need it to integrate with your ERP. So you need a transactional system, with inventory records, technical data, and open orders. You don’t need perfect data quality; Intuiflow will reveal priority opportunities for improvement. Nor do you need a pre-existing MRP calculation.
Prerequisite #2: have a transactional system
– if you’re in business in the 21st century, you probably have one…
Do you need to master your MRP practices before moving on to the “advanced” techniques of DDRMP or, more broadly, a Demand Driven model? “Start by making good use of the current system” is the classic injunction of those who want to delay, preserve the status quo, or hire yet another team of consultants for yet another diagnosis. Everyone knows that MRP is not mastered and that everything happens in Excel.
Prerequisite no. 3: don’t believe that repeating the same recipes will lead to better results
Then you’ll need to connect this transactional system to the digital platform of your choice, such as Intuiflow. Let’s face it, even if it’s now commonplace to complement ERP systems with digital solutions, and even if the integration technologies are available… it’s probably your IT team that won’t be (available). We’ve seen projects with manual daily imports and… it’s not a winning recipe. Intuiflow has comprehensive connectors to the major ERPs, and existing integrations with numerous systems to help your beloved IT-team-who’s-not-available.
Prerequisite #4: Establish interfaces
Does this apply to our company? We’re in the make-to-order (MTO) or design-to-order (ETO) business – our manufacturing processes are complex – or, on the contrary, we have simple but high-volume production. We’re in the ultra-fresh business, and our products have a short shelf-life. Oh no, we have production lead times of several months. Our suppliers ask us for firm orders with a horizon of more than six months, and so on. Does Demand Driven apply?
Curiously, this question is not usually formulated in relation to conventional MRP. Nor in relation to Lean, continuous improvement, Six Sigma, problem-solving, 5S, or any other industrial approach. We implement them, taking the elements that are relevant to us, and trying to adapt them as best we can to our reality and our challenges.
Demand Driven tactics are no exception: they’re a coherent set of principles, methods and tools that need to be pragmatically configured to your reality.
If you manufacture to order, you will not have a stock buffer for finished products, but will take advantage of finite capacity scheduling, constraint and queue management tactics. If you serve your markets from stock, your model will combine tactics in a different way.
Prerequisite n°5: Adapt the methodology to your reality.
Did you tick 1, 2, 3, 4 and 5? Great! You’re well on your way!
One last little ingredient is missing…
Last but not least.
You need a team who see the need for transformation, who understand its relevance, who will convince others, who will face the obstacles and push the walls. A sponsor, a project manager, a team of enthusiasts, some training, some expert support, a healthy dose of desire and a touch of crazyness – in short, like any transformation, you need a project organization.
Prerequisite no. 6: A winning team!
Have you ticked all the boxes? Go ahead and have fun!
