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What is Demand-Driven Supply Chain Management?

Demand-Driven Supply Chain Management

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Demand-Driven Supply Chain Management (DDSCM) and its core, Demand-Driven MRP (DDMRP), are considered a game-changer in supply chain management, enabling massive benefits for organizations. The full implementation of all components of DDSCM is the Demand-Driven Adaptive Enterprise (DDAE), the highest form of Demand-Driven. It is a way to achieve a new level of supply chain resilience. In this blog article, we introduce you to the main principals of DDSCM and you get insights into the award-winning global end-to-end supply chain transformation of our client BSH Hausgeräte GmbH.

The Heart and Engine of Demand-Driven Supply Chain Management: DDMRP

Demand-Driven Material Requirements Planning (DDMRP) is a powerful approach helping you master volatility. It focuses on the variability in today’s supply chains rather than forecasting and is an important building block for achieving higher resilience. The disruptive character of DDMRP requires companies to radically redefine their planning and execution processes. Companies will greatly benefit from that concept by significantly improving key performance indicators.

Increase Your Service Levels up to 54%

After implementing Demand-Driven Supply Chain Management, enterprises on average experience a service level increase up to 54%, a decrease of lead time up to 85%, and an inventory reduction up to 70%. DDSCM significantly improves supply chain performance across industries. The further a company has progressed on the path to becoming a Demand-Driven Adaptive Enterprise, the more comprehensive and strategic will the benefits be that can be achieved at each step of the way.

Manage Variability in Today’s VUCA World with DDSCM

Almost all ERP or SCM/APS systems today are still working with the material requirements planning (MRP) processing logic from the 1960s. But that only works with very accurate demand forecasts – an impossibility in today’s lightning-fast global economy. Demand-Driven Supply Chain Management with DDMRP at its core is a strong approach to mastering the extensive variability in today’s supply chains of the VUCA world, where VUCA stands for volatility, uncertainty, complexity, and ambiguity.

How to Adopt DDSCM

Adopting DDSCM is a business transformation that must be strategically planned and implemented. The award-winning Demand-Driven supply chain transformation of BSH, a company of the Bosch group shows how to successfully master this challenge.

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