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Demand driven materials requirements planning: Benefits of flow

September 8, 2020

In the new reality of global disruptions, companies need to drive profitable growth in a volatile and disruptive environment by establishing new strategies that balance cost, capital and service whilst dealing with increasing pressures due to innovation, growth and agility.

 

Supply chains have started to recognize and embrace a new paradigm that moves away from traditional Material Requirements Planning (MRP). This trend will increase as leadership realizes the reality of global disruptions and their significant impact.

 

Moving forward, supply chains must be configured for resilience in the face of these risks. What is resilience? Resilience is a system’s ability to respond to a disturbance while maintaining and/or restoring equilibrium. Supply chain resilience is how well a system can return to stability when it experiences random or even self-imposed disruption.

 

Supply chains must be encoded with a new DNA; a DNA based on flow where the rate of supply is aligned to the rate of demand through the end-to-end supply chain.

Regardless of the industry, companies that focus on flow experience a major improvement inventory and service levels across their supply chain. The faster material flows through a supply chain, the less inventory is needed to maintain service levels as well as reaction time decrease allowing supply chains to adjust quicker to changes in demand or supply.

Nate Palmer​

SENIOR MANAGER – SUPPLY CHAIN AND OPERATIONS​

Jean-Christophe Ledoux

Managing Director – Accenture

Michel Roger

Managing Director – Supply Chain & Operations, SAP Business Group

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