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DDSC impact on production and procurement functions must be carefully calibrated.
I have seen Demand Driven Supply Chains (DDSC) getting implemented in many companies across various industries. While Sales, Customer Service, and Distribution teams love it, the reaction of Production and Procurement teams varies significantly.
In some companies, these two teams adopt it smoothly, while in many other companies, we find a fair amount of resistance from them. Such behaviour is often attributed to differences in level of flexibility in backend operations, which is true. The more flexible the operations, the better is the adoption of DDSC.
The other significant reason which is often missed out is the design parameter of demand latency. We know that the demand patterns change continuously at the granular level. How soon do we pick up the demand shift and act on it? It can be level shift, change in trends, cyclicity or seasonality. If the time lag between demand shift and supply planning is high, it causes large and lumpy changes in production and procurement requirements.
The good news is that demand latency can be kept low while designing the Demand Driven Supply Chain.
Do you know the current demand latency in your supply chain?