The good reasons to use DDMRP for your Supply Chain

(for an version in Italian click here)

Changing an established planning methodology into a Company is not a path to take too lightly, but we shouldn’t fall in the error of be left behind or forget to innovate or improve just to not approach this demanding path.

When we propose to change something the first question popping up is “why?”. It’s a polite question almost naturally generated: it’s true that changing always represents an opportunity to be better and to evolve, but it’s also comprehensible we can’t have a blind start.

A change certainly needs some preparation and planning. Given that we’re talking about planning, it looks like paradoxical to inspire others to change their planning methods without any planning: it would sound little odd at least.

Keep in mind that DDMRP brings simplification, ability to be more effective and remove complications, so also the process to explain and approach DDMRP shall be simplified, effective and complication-free: in a few words, transparent.

It’s easy to be transparent with DDMRP because everything is here, in front of us, with no trick or traps and very easy to evaluate: the only real challenge is changing the standpoint, the way to consider planning; change thinking and management.

?There are several answers to the question: “why implementing DDMRP in the Company?”

The most complete: the primary objective of a DDMRP implementation is to put control back where it belongs and to provide an easy-to-use system that delivers visibility and control to aid decision making in S&OP (Sales and Operation Planning)

The most frequent: DDMRP is a methodology Transparent, Easy to interpret, Consistent and Sustainable.

The most technical: DDMRP help in reduce waste of resources so it’s helping in pursue business sustainability.

?There is another important point, a first-class one, taking the priority on others being in the sphere of purposes, values and cause: the Demand Driven Institute is an organization for education and training into the DD Space; education and training are factors today forgotten in the world of implementation of systems and methodologies, but I believe they are fundamental instead. A system is an entity much more extended than software+process, a real system is an entity Company-People-Software+process, and for this reason education and training are part of the base, because they act in the part of the system Company-People. And precisely due to its own structure, DDMRP is not letting you down or forget about you during or even after the implementation, because Company and People are developed and trained, and when more training and education are needed, they are always available (and recommended).

DDMRP include People in the system. Education is an essential part of the process to approach and adopt DDMRP because it’s exactly from knowledge that the change starts, not vice versa. The educational path is not available just for who is intended to propose the methodology, but it’s openly available and recommended for who will operate inside the model at any level, from planner to leadership.

Endorsed Instructor network makes possible to easily share the knowledge, and the certified program for any different level creates a professional path for who uses the Demand Driven Operational Model inside the company: the results is the shortening of acceptance time, mitigation of those negative factors inside the process, people professional growth and an organized and quick target achievement.

Attention to people and knowledge is another reason to adopt DDMRP

From the Sustainability standpoint, that it is not referred to environmental sphere only, it has a much wider meaning including economic and social sustainability: only blending these three cornerstones we can concretely move ahead. Environmental sustainability is about ecology, energy saving, alternative sources, waste and pollution reduction and planet safeguard; economic sustainability drives to ethic businesses, run by healthy and dynamic companies perpetuating its core values and looking at the profit as a consequence of virtuous activities and not as primary objective; social sustainability is about an inclusive World that brings back people and intellect at the center of system creating well-being for humans (safety, health, educations) equally distributed.

Let’s analyze the DDMRP benefits from the sustainability side: (?? environmental sustainability???? ?? economic sustainability???? ?? social sustainability)

??????????????? Cash velocity and generation ??

??????????????? Improvements of service level in production due to reduction of delays ??

??????????????? Reduction of execution time (both in production and planning) ?? ?? ??

??????????????? Increase of time available to spend for staff ??

??????????????? Reduction of obsolescence and Inventory leftovers ?? ??

??????????????? Reduction of operational costs due to less emergency situations ??

??????????????? Logistic efficiency improvements ??

??????????????? Reduction of back orders and increase of Speed to market ??

??????????????? Increase of staff morale due to less stressful problem-solving situation ??

??????????????? Inventory reduction ?????

??????????????? Wastage reduction ??

??????????????? Improvements in the decision-making process (ability and speed) ?????

??????????????? Processes simplification and reduction of extra efforts ?????

??????????????? People education and skill’s growing ??

Last but not least, the financial standpoint: one of the key benefits – or to be more precise the results of all benefits led by the application – of DDMRP is to contribute to ROI maximization, and doing it in an almost direct way. This put DDMRP among the very appealing topics for the CFO, or better, becoming the necessary tool to support CFO’s targets achievement. A Demand Driven operating model’s target is to protect and promote the flow of relevant material and information, based on Plossl’s law (George Plossl, one of the founding fathers of MRP that 50 years ago revolutionized Supply Chain management): “all benefits will be directly related to the speed of FLOW of (relevant) materials and information”. This is the key: #thinkflow!

Be Demand Driven means being a great functional Team: how to get there? First step is to get information, second step is thinking to a DDP program (Demand Driven Planner), third one is go deepen and start the transformation:

b2wise, thinkflow

b2wise, the webinars

b2wise, the trainings

Demand Driven Institute, the methodology