This is part of my blog series on using the principles of Demand Drive MRP and its five primary components. I would recommend reading the blog posts in order for better understanding:

1. Is Orlicky’s MRP relevant today? Think DDMRP
2. What Sales and Marketing can learn from Demand Driven Manufacturing
3. Positioning your organization to learn from your customers
4. Profiling the customer by knowledge gaps
5. Dynamic Buffer: Think Self-organized Teams

This particular blog focuses around Demand-Driven Planning or in the marketing sense, systemizing the transfer of knowledge at the execution level.

As discussed earlier in this book, the world of push and promote is dead. The holdovers of that era, both rules and tools, must be stripped away, greatly changed or enhanced, or completely reconstructed. Instead of making things too complex or too simple, it is time to define a planning suite of rules that meet at least two requirements. First is to take advantage of the sheer computational power of today’s hardware and software. Second is to take advantage of the new demand-driven approaches. When these two elements are combined, then there is the best of both worlds: relevant approaches and tools for the way the world works today and system that promotes better and quicker decision- and actions at the planning and execution levels

The above is from the Orlicky’s Material Requirements Planning 3/E. written by my recent podcast (Is Orlicky’s MRP relevant today? Think DDMRP) guest Carol Ptak and Chad Smith of the Demand Driven Institute.

Even in the marketing sense the two requirements outline by the authors make a great deal of sense. The new set of rules computational power have given us metric after metric to analyze, distribute and even sense the marketplace. What we have not done very well is understand how to use them in a productive manner. We have even created demand-driven approaches, (outlined in the previous blogs in this series) that allow the empowerment of teams at the execution level. How do you create a plan around this? It seems on one hand that we have metrics but on the other we empower teams to do whatever they want.

In traditional planning, we do little except set targets for where we want to go and then create the plans around them. We may go ask sales and even customers some projections but the planning exercise typically turns into something like we want to increase revenue by 10% and how are we going to do that. In addition most sales cycle’s evaluations are built around either how quickly we can accelerate the process through the funnel or how we can increase prospects by stuffing more into it.

Using the ideas created through Demand Drive planning, we could start with a more definable solution based on our knowledge gaps and the high, medium, low touch points that a customer requires (Ref: Profiling the customer by knowledge gaps) in our prime markets. Planning then takes on real meaning as no longer are we taking an arbitrary set of numbers but instead real action on how we can improve in our buyer relationships.

Our planning though must be customer centric versus prospect based. Your core customer may need high or low touches and you may not have a relationship where you are striving for anything except best price. It is where you are, not where you want to be. But what you have just done is defined a performance gap in sales and marketing performance that you can develop a plan around. As you review it, you will look to other similar and dissimilar customers to combine or create their own lanes and supporting processes.

Our data selection should be defined in a micro and macro level. I would encourage that the micro level data be set up to rather autonomous, simple and very easily understood by the team. However, the most important data would be contained in the visual task or Kanban board. At the macro level this information can be mollified and monitored but it takes a strict discipline to allow the team to continue to work autonomously. Should that information be shared outside of scheduled meetings? I would if it is tactical in nature but only through the team coordinator. Adding data to the routine either at the micro or macro level should be decided upon at the monthly strategic session and that discussion should be centered around what we are not using as much as what we want to add. The addition of more metrics or data collection should always be subordinated to whether it increases your organizations ability to share and create knowledge with your customer.

What is Demand Driven Material Requirements Planning (DDMRP)?
Demand Driven Material Requirements Planning is an innovative multi-echelon pull methodology to plan inventories and materials. It enables a company to build more closely to actual market requirements and promotes better and quicker decisions and actions at the planning and execution level.

Share this: