Oct 4, 2023
•2 minute read
demand driven planning
Demand-Driven Planning – Step 5 – Visible and Collective ExecutionVisible and Collaborative Execution refers to the methodology employed by the Demand Driven Material Requirements Planning (DDMRP) system to manage and oversee open supply orders. It emphasizes the importance of transparency in the supply chain, allowing stakeholders to view and track the progress of orders in real-time. Furthermore, by fostering a collaborative environment, different players in the supply chain can work cohesively, making necessary adjustments based on prevailing conditions. This proactive and interconnected approach ensures timely deliveries, reduces excess inventory, and enhances the responsiveness of the entire supply chain.
MD04 is a frequently used standard transaction which gives planners an overview of demand, inventories, and goods received. SCM consulting solutions provide an advanced version of this transaction as an add-on, which features a range of additional functions including information for demand-driven approach. It uses color coding to indicate the status of materials, from dark red (highly critical), red (critical), yellow (low), and green (sufficient), to blue (overstocked) as seen in the image below.
Building Demand-Driven Supply Chains with RevealBusinesses employ a push-based supply chain strategy, driven by historical data or plant production capacity rather than effectively managing inventory to align with actual market demand. This approach often results in inefficiencies such as surplus raw materials, low inventory turnover, unproductive usage of storage space and ultimately leads to crisis management, reactive communication, and contributes to a production plan that doesn't accurately reflect consumer demand.
In contrast, transitioning to a pull-based supply chain strategy enhances business efficiency by accurately responding to customer requirements. This method promotes business agility, optimizes operational planning, and allows the learning from discrepancies to improve forecast accuracy. Additionally, a pull system promotes a unified management approach, utilizing a single data set and assumptions for business decision-making. A pull supply chain can generate a number of benefits including production accuracy, real-time production, shorter lots/cycles, inventory optimization, waste reduction, insights-driven management and proactive communication. Reveal proprietary methodology, oVo®, centered around value creation, assists enterprises in fine-tuning their procurement and manufacturing procedures to satisfy market demands. This approach encourages organizations to rely on a unified, authoritative data source for improved decision-making and streamlined operations.
Jul 10, 2023
•3 minute read
Demand-Driven Planning – Step 4 – Demand Driven MRP (DDMRP)Demand-driven Material Requirements Planning (DDMRP) is a modern approach to supply chain management that focuses on meeting customer demand efficiently while minimizing inventory costs. Unlike traditional Material Requirements Planning (MRP) systems, which rely on forecasted demand and fixed lead times, DDMRP uses actual customer demand signals to drive replenishment decisions in real time. By continuously monitoring demand patterns and adjusting inventory levels accordingly, DDMRP enables companies to improve responsiveness, reduce lead times, and optimize inventory levels. It takes into account demand variability and considers factors like demand spikes, seasonality, and promotional activities to ensure that the right amount of inventory is available at the right time. By aligning supply with actual demand, DDMRP helps organizations achieve greater customer satisfaction, reduce stockouts, and enhance overall supply chain performance.
This article focuses on Demand-driven Material Requirements Planning (DDMRP) and how customized MRP type add-on provides the logic to calculate material requirements as part of the demand-driven replenishment approach and adds it as a new MRP type.
Jun 12, 2023
•4 minute read
Demand Driven Planning – Dynamic Adjustment – Step 3Buffers need to be re-calculated dynamically if material, market or company-related parameters change. This can be done with the consulting solution safety stock and buffer simulation. Buffers must be recalculated if the average daily usage changes and changed daily, weekly, or monthly depending on the analysis period. If the average daily usage is calculated based on the last three months, the key figure should be checked daily or weekly. If the base is more than six months, it is sufficient to recalculate the key figure monthly. With the SAP add-on safety stock and buffer simulation (TCODE: /SAPLOM/SSS), demand influencing factors like the average daily usage can be changed This article focuses on the third step identified by the Demand Driven Institute, called Dynamic Adjustments.
Apr 17, 2023
•3 minute read
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