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Fighting Demand Driven Untruths

By Bernard Milian
Wooden Pinocchio's nose caught in a mouse trap

The world of supply chain experts loves a good turf war. 

When, ten years ago, I began to take an interest in the subject and to promote Demand Driven tactics in France, it was because they echoed in a relevant way my then almost 30 years of industrial experience in several industries. What appealed to me was that the methodology brought together well-known techniques – from Lean, MRP, and Theory of Constraints – enriched with a touch of common sense and the right kind of digitalization.

As a somewhat naive practitioner, I thought that the methodology, and the practical tools to implement it, would receive a unanimous welcome. Alas, from the very first steps, fierce opponents arose – often without delving deeply into the subject – simplistic approach, obsolete, not technical enough, not mathematical enough, not suitable for all articles, not suitable for all industries, etc.

Some of this opposition came from consulting firms and software publishers – notably ERP and APS – and was often turf protection for their business model.

Fortunately, a community of practitioners has sprung up, and in most cases with great success.

There’s one sure sign: while Demand Driven Technologies was the only solution provider at the time, today more than 40 software products are “DDMRP certified” by the DDI – isn’t being copied proof that you’re right? 

However, there are still only a handful of software solutions that are certified, as we are, according to the 3 DDI criteria – inventory management, complete operating model, and S&OP. We hope to be quickly copied in this field too. The fact that some solutions offered are incomplete contributes to a common misunderstanding that Demand Driven tactics are just a colorful inventory management method.

Recently, we’ve also seen consulting firms in France launch their own revolutionary supply chain methodologies – proprietary methodologies, of course – which are presented as “alternatives to DDMRP”. What a long way we’ve come in ten years! Demand Driven tactics have gone from being a marginal methodology to be mistrusted to a benchmark to be compared with… 

These self-proclaimed alternatives are well marketed: supply chain without a chain (and therefore I guess liberated, without dirt and grease), green waves respectful of constraints – and of course the planet, as it should be today – will recognize whoever wants to.

To promote their alternatives, opponents of Demand Driven tactics are quick to assert all sorts of untruths, which need to be debunked. Here is a small, non-exhaustive selection. 

“Demand Driven” means yoyoing

The argument: consumption irregularities are passed on to production and suppliers, so the signal is very unstable.

False: Demand Driven tactics are based on the principles of a smoothed pull flow. Proper implementation results in a stabilization of the flow. It’s a proven technique for mitigating the bullwhip effect.

“Demand Driven” requires a one-piece flow

The argument: to constantly adapt to market demand, we need to manufacture by the unit.

False: Demand Driven tactics take into account batch sizes, campaigns, and so on. They make it possible to visualize their impact and encourage better alignment of these batches with actual demand.

“Demand Driven” does not support planning wheels

The argument: for some industries, a repetitive planning wheel is an effective way of combining industrial constraints and market demand. Demand Driven cannot accommodate that.

False: Demand Driven tactics as implemented in Intuiflow integrate planning wheels.

“Demand Driven” does not take capacity into account

The point: Demand Driven tactics, like Kanban loops, are infinite capacity. My production has capacity constraints.

False: Demand Driven tactics as implemented in Intuiflow enable finite capacity, to schedule short-term operations on the shop floor, as at the S&OP level.

“Demand Driven” is simplistic

The argument: Stock sizing is simplistic and doesn’t take advantage of technological advances.

False: Intuiflow integrates an artificial intelligence engine for stock sizing.

“Demand Driven” ignores forecasts

The argument: To match actual consumption, DDMRP ignores forecasts.

False: Have you seen Intuiflow’s forecasting module, which feeds S&OP and buffer sizing?

“Demand Driven is not adapted to complex production processes

The argument: Demand Driven tactics are good for FMCGs: high volumes, simple flows – not suitable for complex job shop production.

False: Have you seen Intuiflow’s scheduling and execution module, developed and tested over the last 15 years, which enables advanced implementation of Drum-Buffer-Rope techniques derived from the theory of constraints? Do you think that the industrial operations of Caterpillar, Hutchinson ADI, NOV, and Koch Industries consist of manufacturing a bulk product and packaging it?

We could go on for pages and pages, given the proliferation of untruths and preconceived ideas. If you’d like to find out for yourself, please don’t hesitate to contact us. And if you hear any more untruths, don’t hesitate to send them to us – we’ll publish a Volume 2!

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