We are proud to announce that as of December 2019, the ForgeFlow Demand Driven software has achieved the Demand Driven Sales & Operations Planning (DDS&OP) compliance by the Demand Driven Institute.
What is Demand Driven Sales & Operations Planning (DDS&OP)
DDS&OP is one of the key components of the Demand Driven Adaptive Enterprise Model, and works together with the Demand Driven MRP (DDMRP) and Adaptive S&OP. This model, as defined by the Demand Driven Institute, allows enterprises to sense market changes, adapt to complex and volatile environments, and develop market driven innovation strategies.
© Copyright 2019 Demand Driven Institute. Used with permission
Demand Driven Sales & Operations Planning (DDS&OP) takes the business plan parameters (like sales forecasts, new warehouse availability, etc..) from the Adaptive S&OP component, and configures the Demand Driven Operating Model (DDOM) by means of setting the model parameters (such as buffers, buffer settings, demand adjustment factors), that define the capabilities to achieve expected results.
Demand Driven Sales & Operations Planning (DDS&OP) helps to align your corporate strategy with the operational horizon. It allows to simulate various scenarios based on the business plan parameters and use the planned model parameters to evaluate the impact on the company's capacities and financials. This scenario-based modelling allows planners to identify options for their tactical planning and recommend and implement changes to the Operating Model.
The sales department has produced a forecast for the next 12 months. Sally, member of the DDS&OP team uses the forecast to run a simulation of the Operating Model, using as starting point the same Model configuration that the company has been using this past year. The same buffers, with the same master settings. The simulation results in a projected inventory On-hand, buffer levels, simulated Planned Orders and Work Orders that Sally then uses to evaluate the impact of the forecast.
Projected buffer levels
Projected order release quantities
Sally makes the following observations:
- There are various periods of severe projected stock-outs, were the buffers are going to be incapable to react to the highly volatile demand.
- The the simulated Work Orders would cause an excessive workload on the existing resources during some periods of high demand. This product has a significant seasonality component that she'll need to take into account in order to properly level the capacity.
She then introduces Planned ADU Adjustments throughout various periods in order to force the system to create stored extra capacity during low demand periods that can be used during peak demand periods. In order to calculate the correct ADU adjustment factor Sally considers that she wants a stable ADU each month, in order to better plan the resources, and she wants to increase the ADU to cover for the stock-outs.
After running the simulations again:
Projected buffer levels after ADU Adjustments
Projected order release quantities
As a result of introducing planned ADU adjustment factors Sally now expects to be able to increase the service levels, and stabilize the Average Daily Usage, in order to align it with the planned capacity. She will now introduce the ADU Adjustment factors into the Demand Driven Operating Model, and will follow-up on the actual results during the following months using the buffers Variance Analysis.
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