Planning a Successful Demand-Driven Implementation

The demand-driven operating model is changing the face of supply chain management — and for good reason.

A demand-driven operating model (DDOM) simplifies planning, alleviates production pressures, optimizes inventory, and even increases revenue.

Does it sound too good to be true? It’s not. Often, when people see demand-driven principles in action, they ask “why isn’t everyone doing this already?”

Becoming demand-driven is not about the software and technology — it’s about the process and the people.

While DDOM and its associate DDMRP (demand-driven material requirements planning) are simple in concept, they can be difficult for businesses to implement if they don’t have the appropriate mindset in place.

Setting Up Your Business for Demand-Driven Implementation Success

Roger Fleury, Practice Lead at SHEA Global, has helped many businesses implement demand-driven models into their organizations and knows what challenges can come up along the way.

“Putting in a DDOM is going to focus on the planning and supply chain departments but will naturally impact many other areas,” Fleury says.

“You always have to marry local/departmental requirements with wider corporate goals.”

That can prove challenging if the executive team doesn’t understand the concepts of demand planning. This could result in a lack of funding for the project or pushback about whether it is necessary in the first place.

It can also be difficult if the demand-driven mandate comes from the top of the organization, but the implementers or production line staff don’t understand the need.

If you want to truly transform the operational effectiveness of an organization, you need to have buy-in from everyone — both at the top and bottom of the corporate structure.

“However,” Fleury says, “the top holds the purse strings, so start there.”

Improving Buy-In for Demand-Driven Operations

There are several ways businesses can improve buy-in from the start of the implementation process at any level of the organization.

  • Look for training that makes the concepts actionable

Workshops such as DDBRIX take demand-driven and Lean assembly concepts and make them accessible to attendees.

As recent DDBRIX Toronto Workshop attendee Kevin Hollis put it, “You couldn’t argue with the numbers because you just experienced it.”

If you are looking to improve demand-driven understanding across the organization, training like DDBRIX is time-friendly and proves the effectiveness of a demand-driven model.

“DDBRIX works best in multi-disciplinary teams,” Fleury says. “It’s a great forum to discuss the issues facing an organization and how repeating the same old solutions will not ultimately lead to lasting improvements.”

While longer training may be necessary for those implementing DDOM, an action-oriented overview can be enough for team members who primarily need to understand the benefits and see the results before implementation, such as the finance and IT departments.

  • Participating in pilot programs

Demand-driven pilot programs take education further by actually implementing the concepts into your organization. You can try out DDMRP and show tangible results to decision-makers, even without necessarily having a long-term strategy.

“There is nothing wrong with “just” implementing a DDOM without the grand plan in place,” Fleury says.

“There are so many soft and hard benefits of thinking demand-driven that a basic implementation will pay for itself many times over. At the same time, having a model in place will open up many avenues of improvement for an organization to explore.”

A pilot program is a great way to experience those benefits and think about how to extend them to other parts of your business – such as product planning, S&OP, the production line, and beyond.

  • Ongoing education and training

Demand-driven education, training, and understanding shouldn’t stop at implementation.

In certain cases, particularly in an acquisition or merger, education and training may again be necessary for new team members.

And even for existing staff, ongoing training is often beneficial.

“ERP or DDOM cannot be installed once and expect to be relevant years later without continuous improvement,” Fleury says.

As priorities and people adapt within an organization, demand-driven thinking should adapt with them — and perhaps even guide the shift.

Putting Demand-Driven Thinking into Action

If your business is on the fence about demand-driven operations, think about the potential benefits associated with it. The demand-driven results often speak for themselves. Once in place, most companies will see further potential in the concepts.

“This does not mean everyone will embrace the methodology wholeheartedly, but results definitely help to bring doubters round,” Fleury says. “How much help each company needs to get to that point will vary… But that is what we are here for.”

While some disruption may occur within the organization when you make the transition, working with a partner experienced in demand-driven training and implementation makes the process painless at all levels of the organization — and increases buy-in across the board.

A demand-driven partner can also help garner results that much sooner and identify areas for future growth and adaptation.

As more and more businesses embrace a demand-driven model, now is the time to get ahead of the competition and start finding results.

“What if your competitors operated a DDOM and became a demand-driven adaptive enterprise (DDAE) but you did not?” Fleury asks. “Would you survive?”

SHEA Global has a proven track record of implementing successful demand-driven operating models. Ask us today about our DDMRP Pilot Program, DDBRIX training workshops, and demand-driven consultative solutions.