Most of the small to mid-sized enterprises with which we engage on supply chain matters have been taking a predictable path in addressing the challenges they face. The find themselves expending tremendous manual efforts—adding man-hours and people—accompanied by costly just in case actions.
These actions generally result in excess inventories and high operating expenses. As a result, even though they are able to grow their top-line by reaching additional markets and adding customers, their bottom-line stagnates—or even declines.
Many of these firms have struggled to make their investment in expensive ERP (enterprise resource planning) and MRP (material requirements planning) system provide the return on investment (ROI) for which they had hoped. Nevertheless, despite their best efforts, ROI on these expensive systems are elusive.
In fact, studies show that regardless of the price paid for traditional ERP and MRP systems, the teams assigned to supply chain and manufacturing management and planning still tend to rely heavily on spreadsheets, in-house developed applications (in Microsoft Access or other), and even whiteboards as planning tools of last resort. They are keenly aware that if they relied solely upon the recommendations coming from their complex and costly ERP / MRP systems, their situations would be made worse, not better.
Finally breaking through
Within the last decade, a new and effective approach to supply chain and manufacturing management has been introduced. This new simple, yet extremely effective, method is called demand-driven material requirements planning (DDMRP) and its newest evolution, demand-driven sales and operations planning (DDS&OP).
These methods have been shown to be effective at eliminating the corporate sinkhole of throwing people (and operating expenses) at the supply chain problems that appear to be never-ending.
This new approach has been demonstrated to support dramatic increases in top-line growth while effectively holding the line on the growth of operating expenses. At the same time, in significantly improves on-time delivery, while slashing away at excess inventories and lost sales due to out-of-stocks.
DDMRP and DDS&OP harmonize the actions of the whole organization—from the C-suite to the shop floor. Supply chains can be effectively synchronized—especially when the DDMRP / DDS&OP is propagated up and down the supply chain amongst trading partners.
If you would like to learn more about this new and highly-effective approach to supply chain and manufacturing management, please contact us. We look forward to hearing from you.
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