THE BASICS OF DEMAND DRIVEN
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What does "Demand Driven" mean?
The term was invented in 2002 at PeopleSoft. It was and is still defined as:
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"Sensing changing customer demand, then adapting planning and production while pulling from suppliers – all in real time!"
Becoming "Demand Driven" requires a fundamental shift from the centrality of supply and cost based operational methods (commonly referred to as “push and promote”) to a centrality of actual demand and flow based methods (commonly referred to as “position, protect and pull”).
The term “actual demand” is extremely important in distinguishing it from a re-branded and somehow superior forecasting approach.
Forecasts are still used in the Demand Driven approach but are tied to operational and tactical capability rather than order activity.
Why do organizations need to become Demand Driven?
Volatility, Uncertainty, Complexity and Ambiguity (VUCA) are on the rise and here to stay. Today's supply chains look nothing like the supply chains of the mid 1960s when conventional planning rules were developed! DDMRP broke the mold and started a new way to deal with the VUCA World.​
From Operations, to Tactics, to Strategy
Demand Driven has progressed from the technical planning and execution solution known as DDMRP, to a larger organizational framework. This organizational framework is called The Demand Driven Adaptive Enterprise (DDAE) model.
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Visit our all-in-one DDMRP page to learn the planning and execution solution that started a revolution!
Learn about the organizational framework know as the Demand Driven Adaptive Enterprise (DDAE) model.