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Demand-Driven Supply Chain Management

Why a paradigm shift in SCM is necessary to become truly demand driven

Demand-Driven SCM is a remarkably simple way of managing supply chains.

E2E Supply Chain Organization

The rationale for Demand-Driven SCM is based on what supply chains really are: flows of materials through several conversion processes that are prone to develop into inventory queues and time delays whenever there is variability.

Flow-orientated KPIs

Forecast errors are the greatest source of this supply chain variability but in today’s complex and volatile markets, attempts at significantly improving forecast accuracy are doomed to expensive failure.

The right Thoughtware is key

The Demand-Driven SCM concept therefore uses actual demand instead of error-prone forecasts to drive replenishment through a de-coupled supply chain, which is a genuine paradigm shift

Demand-Driven SCM involves

  • Positioning independent inventory locations, or buffers, within your supply chain to de-couple your value add activities and prevent the transmission and amplification of natural process variability
  • Sizing and maintaining the inventory buffers in line with average demand and known variability over the lead-time – which means the aggregate inventory is always ‘right sized’.
  • Replenishing every stock position with its own optimal sequence and cycle in line with ex-stock consumption or demand (or “make to replace” and “ship to replace”) which enables the supply chain to autonomously respond to demand without requiring the unplanned service saving schedule amendments caused by inaccurate forecasting.
  • And using exceptional advanced stock builds for extreme, but planned, demand or supply events such as TV advertising campaigns, seasonality and factory shut downs.

 

DDSCM COMPONENTS:

Change Management & Thoughtware

Demand-Driven SCM, despite its simplicity and effectiveness, requires a management program designed to win both hearts and minds by helping everyone in the company to experience the benefits and fully understand the new ways of working.
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Segmentation

The use of demand volume and variability analysis to support selection of the most appropriate replenishment technique.

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Demand-Driven LEAN Supply Chain Planning

An innovative planning concept by CAMELOT that intelligently combines the concept of Demand-Driven Material Requirements Planning (DDMRP with Demand-Driven Rhythm Wheel Planning (DDRWP).

Demand-Driven MRP

The adoption of fully aligned, but decoupled inventory positions and their efficient and stable replenishment in line with demand.
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Demand-Driven Rhythm Wheels

Designed to support the optimal scheduling of production assets in line with demand.
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Demand-Driven S&OP / IBP

For the medium and long-term planning and management of inventories, resource capacities and the consequent financials in line with corporate objectives and strategy.
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Demand-Driven Supply Network Collaboration

The use of the Demand-Driven SCM process for inter-company replenishment flow and planning.
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Demand-Driven Organization

The new and highly efficient ‘end-to-end’ supply chain organisation that can focus upon the planning and management of material flow.

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Demand-Driven Smart Metrics

The use of performance measures and KPIs that support flow centric behaviours that result in maximised end-to-end performance: service, revenue, inventory and efficiency.
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Demand-Driven Software Solutions

Demand-Driven SCM is appropriate for implementation across the entire end-to-end supply chain no matter how complex, global or extended. This inevitably implies the use of functionality rich software that can support the piloting and implementation of the Demand-Driven SCM process across geographically dispersed, but connected, locations.
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The Demand-Driven Adaptive Enterprise

Is the culmination of full implementation of all components of Demand-Driven SCM. The Demand-Driven Adaptive Enterprise (DDAE) Model spans the operational, tactical and strategic ranges of an organization allowing it to continuously and successfully adapt to the complex and volatile supply chains we see today.

Why Camelot

For the Demand-Driven Adaptive Enterprise world, CAMELOT Group provides a unique end-to-end portfolio of services from strategy development to system implementation – through two specialized firms: CAMELOT Management Consultants contributes to Demand-Driven thought leadership, strategy, organizational and process consulting whereas Camelot ITLab division complements this offering by a DDSCM compliant and SAP certified software solution.

For questions and inquiries, please feel free to contact us.

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