Manufacturers will be able to accurately plan stock holding and production quantities thanks to the launch of a new approach that will enable companies to align their supply chain decisions with actual market demand.
The Demand Driven solution has been developed by SCALA, a leading procurement, supply chain and logistics consultancy, and allows businesses to create production and inventory management plans designed to reflect daily demand changes, known product sales variability and accurate lead times.
Combining project and change management expertise with the industry-leading Orchestr8 cloud-based solution, SCALA’s service offers a simple, operational approach that aligns production with the pull of actual demand. It gives an operationally proven alternative to the traditional Material Requirements Planning (MRP) methodology, which is over-dependent on unachievable precise sales forecasts. Rather than being spreadsheet-based, the Orchestr8 software is designed to replace MRP planning systems, not bolt onto them.
Major UK soft drinks business, AG Barr, which owns the famous IRN-BRU brand, has already implemented Demand Driven using SCALA’s approach, having recognised the need to switch to a radically different process that delivers improved service level, manufacturing stability and lower inventory.
By regularly buffering the production system at key points, replenishing the buffers according to actual demand and factoring in lead times, the process allows businesses to benefit from more stabilised production schedules, high customer service levels and inventory reductions of 30%.
Keith Newton, executive director at SCALA, said: “Demand Driven is a new phenomena that is being championed as radical and transformational by supply chain gurus globally. Many companies are now recognising the edge that a demand driven approach can give in terms of improved service, lower inventory and manufacturing stability.
“With the challenges of a changing market, we wanted to offer our clients a simple way of implementing Demand Driven processes that is results focused, practical and efficient to enable them to gain the benefits of improved service and lower inventory and reduce the impact that frequent forecasting changes has on their production lines with traditional MRP processes.
“We chose to partner with the most developed software provider in the field, Orchestr8, which has successfully developed and implemented its software into businesses globally since 2005. Our own project and change management experience will provide clients with solutions to their challenges quickly and efficiently to drive faster results, and bring wider organisational and performance benefits from a successful implementation.”