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How to manage frequent plan changes in a Demand Driven Supply Chain?
Companies with a Demand Driven Supply Chain encounter frequent changes in the suggested plans. This is expected, but the changes should be small and within flexibility of the backend operations.
Since DDSC is more responsive to changes in demand patterns, we should expect more frequent changes in plans, as compared to a Forecast Driven Supply Chain, where plans are often frozen for a month or a week.
If DDSC is designed and implemented well and parameters have been fine-tuned properly, these day-to-day changes are small. If the changes are large with frequent reversal in direction, we should go back to the design and parameter settings.
However, it’s important to check for execution integrity before that. Are the teams executing the plans as suggested or are they overriding it?
My experience suggests that most of the large ups and downs are caused by poor execution. We must set the execution in order, before tweaking the design or parameters.
It’s an important step often overlooked in DDSC implementations.