Having supply chain management dexterity can provide an immense competitive advantage in any industry. You seemingly have to have catlike reflexes to respond to demand if you don't have a crystal ball handy. No one knows this better than, Chad Smith, Partner at Demand Driven Institute. At Prime Advantage's Spring 2015 Conference, he led an enlightening roundtable discussion between manufacturing professionals that underscored how the vast majority of today's planning systems are fundamentally broken. Fortunately, Chad did not leave us to drown under our own piles of excess inventory. Below he has thrown us the life preserver needed to pull ourselves out of MRP disaster amidst current market pressures.
Why Won't Our Planning Systems Work in Today's Manufacturing Environment?
By Chad Smith, Demand Driven Institute
Today's companies are held hostage by hard-coded rules in MRP - rules that act as a foundation for the way MRP functions - rules that have been around since the inception of MRP in the 1950's. Many of which directly result in the distortion and obfuscation of relevant information for planning personnel and lead directly into materials challenges evident in the bimodal distribution. This impediment to the flow of relevant information and materials directly compromises the protection and promotion of sustainable return on investment.
But a new way has emerged. Demand Driven MRP (DDMRP) is a new formal planning and execution method first articulated in the third edition of Orlicky's Material Requirements Planning (Ptak and Smith, McGraw-Hill, 2011). The entire foundation of DDMRP is based upon the connection between the creation, protection and acceleration of the flow of relevant materials and information and return on investment. Industry leaders such Boeing, Unilever, Amore Pacific, Stemcell Technologies and Avigilon are proving that DDMRP not only provides clearer supply chain signals but it is also turning their supply chain management capabilities into a sustainable competitive weapon.
Learn more about unlocking the secret of Demand Drive Material Requirements Planning (DDMRP) through the whitepaper The Power of Decoupling.