Recently, we were assessing a company’s supply chain. They had forecasts in the system, and at a management level spoke highly of their demand driven supply chain. They commented on how they can capture the demand changes rapidly and make the necessary adjustment to demand fluctuation in the system. Then we walked the shop floor, and realized that the folks at the coalface were merely making what they knew they needed. They would fill the demand and then keep making the same product because it was more “efficient” to keep running the machines, whether more product was needed or not. Also, the demand they were filling was what production planning came up with when scheduling a week or two in advance, irrespective of the actual demand (forecast) in the system, because they did not trust the sales forecast. Sound familiar?
Becoming truly demand-driven is core to the journey of Business Maturity® and evolving into a streamlined, data-driven, agile enterprise. You not only have to trust the demand, but you also have to listen to it and produce and buy to the actual demand, even if it is not perfect (and by the way it never is). Only when the whole organization believes and works together to meet demand do you see a truly agile intelligent organization.
