Many manufacturers are turning away from the more traditional demand planning manufacturing and moving toward a demand driven manufacturing (DDM) system that relies on actual customer orders instead of forecasts. Demand driven manufacturing offers a variety of benefits, such as: reduced production costs, improved accuracy on order fulfillment, reduced inventory and increased on-time delivery.
A demand driven manufacturing study by the Aberdeen group indicated that manufacturers move toward DDM for several reasons, including:
- Improve the response to market demand
- Manage variability in the supply chain
- Reduce manufacturing costs
- Increase profitability
- Improve competitive advantages
One challenge of DDM is synchronizing demand with production. It’s a difficult challenge and one that many companies are finding tough to accomplish. Industry leaders are implementing advanced scheduling and inventory control systems.
Many manufacturers moving toward DDM have also implemented lean manufacturing initiatives along with controlling the flow of materials through the supply chain.
If you’re not currently utilizing demand driven manufacturing, there a few steps to consider to lay the foundation for a successful DDM transition:
- Transition any traditional lean manufacturing initiatives from total cost-based to a focus on customer service improvement and reacting to demand variability.
- Implement production and planning scheduling solutions that will address constraints such as manufacturing bottlenecks, materials and labor in real time.
- Initiate automated lean manufacturing solution to streamline material flow throughout the supply chain.
Demand driven manufacturing is not easy nor is it a quick transition but it could hold the key to the future of manufacturing. Have you implemented demand driven manufacturing principles in your company?
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