You are not as unique as you think
We have heard every excuse in the book as to why a company is not able to implement a demand driven system. We are too big. We are too small. Our products are too custom. We have unpredictable demand. Our product line is too complex. Our product line is to simple…..etc…etc.
History has proven that companies across a wide variety of industries and manufacturing styles have the same basic fundamentals at the item setting level. The DBA demand driven system can work for all types of manufacturing. We have yet to see a company that could not benefit from the demand driven approach.
Demand driven planning is ideal for custom manufacturing
Custom manufacturing companies are especially skeptical that demand driven planning can work for them. Custom manufacturers over compensate with extensive job linking and an over use of To Order components. We see planners that attempt to do long term planning and BOM explosions even with mostly custom items. They suffer from a severe “bull whip” effect and their inventory efficiency is a disaster.
Custom manufacturing can actually benefit the most from strategic stocking of key components to reduce time to shipment. Think of a company like Dell Computer where you can order a highly customized PC. Dell makes sure that the have sufficient stock for all of the components for their custom options and this allows them to make a complete customized top level PC in a very fast time to shipment. You can emulate this by having one off items as your parent BOM, but strategically stocking your key components.
Your strategy is completely under your control
As long as you have reasonable lead days on your purchased items, reasonable job days for your manufactured items, and a clear cut order policy based on lead day contribution, any company type will benefit from the demand driven approach. If your settings are reasonably accurate, you will have sufficient time to replenish your items before you run out of stock.
You can start with most all components To Order and you can slowly start placing strategic stocking policies on commonly used subassemblies and purchased components. You can use the Lead Days Inquiry in MRP Settings to choose which items to strategically stock and reduce our times to shipment.
Fear of change is your biggest obstacle
Most companies that we see fail are just reluctant to give up their status quo silo planning solutions. All companies need to get a handle on the replenishment times for the item’s they manufacture or purchase. DBA users discover that placing strategic stocking policies on some key items can have a profound impact on their throughput and cash flow.