A New Way to Run a Supply Chain in Today's Complex Environment
A Demand Driven Operating Model (DDOM) is a supply order generation, operational scheduling and execution model utilizing actual demand in combination with strategic decoupling and control points and stock, time and capacity buffers in order to create a predictable and agile system that promotes and protects the flow of relevant information and materials within the operational relevant range (hourly, daily and weekly). A DDOM’s key parameters are set through the Demand Driven Sales & Operations Planning (DDS&OP) process to meet the stated business and market objectives while minimizing working capital and expedite-related expenses.
Carol Ptak and Chad Smith of the Demand Driven Institute walk through the three components of a Demand Driven Operating Model - Demand Driven Material Requirements Planning, Demand Driven Scheduling and Demand Driven Execution. This video is from the May 2017 Demand Driven Webinar Series.
The Basics of the ddom
The Demand Driven Operating Model is the flow-based operating model used by a Demand Driven Adaptive Enterprise. The DDOM is designed around four basic elements.
Paces to Actual Demand
The Demand Driven Operating Model uses only actual demand for supply order generation. There are no planned orders and no Master Production Schedule!
Strategic Decoupling Points
The Demand Driven Operating Model uses strategically placed decoupling points to compress lead times, shorten planning horizons and dampen demand and supply variability.
Strategic Control Points
The Demand Driven Operating Model uses strategically placed control points for scheduling and resource and order synchronization.
The Demand Driven Operating Model protects its decoupling and control points through dynamic stock, time and capacity buffers
How the DDOM Works
The Demand Driven Operating Model has three basic components that work in concert. Demand Driven MRP (DDMRP) provides supply order generation and management signals. Demand Driven Capacity Scheduling provides resource scheduling synchronization. Demand Driven Execution is about real-time order and buffer management.
The configurations for DDMRP and Demand Driven Scheduling come from Demand Driven S&OP. In the Demand Driven Operating Model the conventional notion of a Master Production Schedule is replaced with Master Settings managed in the DDS&OP process.