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Demand Driven, also known as Demand Driven Material Requirements Planning — DDMRP, is a methodology for planning and managing materials and inventories. The big difference between this methodology is that it allows companies to carry out warehouse supplies in accordance with the real demand in your market.
With its use, organizations can accelerate the decision-making process from planning to execution of procurement. Focusing on reducing large inventory changes usually called the whip effect. Demand-driven also reduces dependence on sales forecasts.
On the other hand, the concept of S&OP, in Spanish, sales and operations planning, refers to a planning method that seeks to reconcile the commercial forecast with the needs or requirements of the areas of logistics and finance.
Demand Driven and S&OP seek to improve supply chain tasks, so that problems with product availability do not occur. Problems that may cause a shortage of stock, inventory failures, low productive capacity and a decrease in the quality of services.
Both methodologies improve the integration of all areas of the company to ensure that companies can have well-thought-out and effective business plans in the short and long term.
The implementation of Demand Driven and S&OP helps to synchronize the supply chain with the sales area. Synchronization that reduces operating costs and increases final customer satisfaction.
With Demand Driven, you can set up a production system known as Demand pull. This means that it is activated and managed according to the demand registered by the company's system. The opposite of push systems, where sales are pressured by production levels or stock levels in the inventory.
With Demand Driven, you can set up a production system known as Demand pull. This means that it is activated and managed according to the demand registered by the company's system. The opposite of push systems, where sales are pressured by production levels or stock levels in the inventory.
By implementing a DDMRP methodology, production focuses on customer needs. In addition, this method allows companies to be aware of their consumers' up-to-date purchases, better control their inventories, be more assertive with their decisions and achieve greater profitability and success with their offer.
Sales and operations planning integrates different areas of business management, constantly reviewing demand and available supplies.
It starts with establishing a production plan and other tasks related to sales compliance. All with the objective of meeting business objectives, usually related to profitability, productivity and delivery times.
The S&OP determines production rates following management's instructions to maintain, increase or decrease the quantities of products in inventories or delays. Likewise, an attempt is made to keep the workforce at stable levels.
This methodology also includes: planning equipment, facilities, materials and finances according to production objectives or plans. Therefore, it manages to have influence in areas such as manufacturing, engineering and marketing.
Both methodologies are excellent options for improving production processes and achieving positive and profitable results for the end customer. We can help you implement some of these approaches with comprehensive and innovative artificial intelligence solutions.
