To showcase examples of supply chain transformation projects, we’ve compiled a summary of eight DDMRP (Demand Driven Material Requirements Planning) case studies presented at the Demand Driven World conference in Frankfurt on October 17-18. This summary highlights the key impacts and KPI improvements achieved by each company. Interviews with the speakers and further details will be available in the coming weeks at this link.
1. PPG (Latin America)
- Scope: 18 manufacturing sites, 23 distribution centers.
- Main Effects: Improved inventory health, reduced obsolescence.
- KPI Improvements:
- OTIF (On-Time In-Full) increased to 93-95%.
- RM (Raw Material) Service Level reached 74-90%.
- Days of Inventory reduced by 13% (Mexico) and 9% (Colombia).
- Obsolescence decreased by 40%.
2. Koch Engineered Solutions
- Scope: Wichita and Tulsa facilities.
- Main Effects: Reduced backlog, improved on-time schedule.
- KPI Improvements:
- OTP (On-Time Performance) for projects improved to 95%.
- Inventory turns increased to 3.7 (Wichita) and 4.0 (Tulsa).
- WIP (Work in Progress) reduced by 40-56%.
- Stockouts decreased by 3%.
3. SAPA
- Scope: Multiple production lines and buffer management.
- Main Effects: Reduced inventory and lead times, decreased stockouts.
- KPI Improvements:
- Inventory reduced by 20%.
- Lead times shortened by 40%.
- Planning time reduced by 40%.
- Stockouts decreased by 40%.
4. JW (Jeld-Wen)
- Scope: 33 managed sites and 75,000 stock positions.
- Main Effects: Lower inventory levels, improved service reliability.
- KPI Improvements:
- Past due units reduced from 750,000 to 37,500.
- Supplier OTIF increased from 35% to 90%.
- Inventory turnover (TIRA) improved from 35% to 72%.
5. A2A (DigiMaMa Project)
- Scope: 40 network nodes and 800 users.
- Main Effects: Enhanced material availability, reduced stockout risks.
- KPI Improvements:
- Stockout risk for SKUs reduced from 35.7% to 10.9%.
- Inventory turnover increased from 0.97 to 1.54.
6. Mettler Toledo
- Scope: 20 plants, 200,000 parts.
- Main Effects: High service levels, reduced inventory costs.
- KPI Improvements:
- Global stock availability around 99%.
- Inventory carrying costs and obsolescence reduced.
- Premium freight expenses lowered due to improved planning.
7. Mega Alimentos
- Scope: 3 distribution centers with a focus on high-demand products.
- Main Effects: Increased service levels, market responsiveness.
- KPI Improvements:
- OTIF increased by 19.5%.
- Inventory decreased by 12%.
- Reduced sales loss due to shortages, leading to higher sales.
8. Assa Abloy
- Scope: Multiple factories (Pedestrian, Garage Door, and Dockleveler).
- Main Effects: Enhanced delivery precision, inventory reductions.
- KPI Improvements:
- Delivery precision improved by up to 9%.
- Days of inventory reduced by 70% (from 50 to 15 days).
- MTPT (Manufacturing Throughput Time) reduced by 33-45%.
- Inventory reduced by 37%, saving €1.7 million.
Overall Summary of Key Impacts Across All Cases
- Service Level Improvements: Significant increases in OTIF and service reliability across all cases.
- Inventory Optimization: Inventory levels and carrying costs reduced, resulting in better cash flow and fewer stockouts.
- Lead Time Reduction: Lead times shortened, allowing for faster responses to demand fluctuations.
- Operational Efficiency: Manufacturing throughput time and planning time improved, reducing waste and enhancing productivity.
- Cost Savings: Lowered obsolescence, reduced expedited freight costs, and minimized stockouts contributed to substantial financial savings.
Each company leveraged DDMRP to achieve more responsive, efficient, and cost-effective supply chain operations, showcasing the methodology's power to transform supply chain performance across various industries.
Want to learn more about the methods HOW to transform a supply chain?
Join us for the upcoming APICS Certified in Transformation for Supply Chain (CTSC)and ASCM SCOR Model Workshop (SCOR DS) workshops in Dezember 2024 Munich!
