Striving for Coherence
Prerequisites for Relevant Information
Convention’s Failure with the Prerequisites
Summary
CHAPTER 7
The Demand Driven Adaptive Enterprise Model
The DDAE Model
The DDAE Model and Relevant Information
Adaptive Sales and Operations Planning
The DDAE Development Path
Software Implications
Summary
APPENDIX A
Simulating DDMRP Performance Against Lean and MRP II
By Dr. Romain Miclo, Dr. Matthieu Lauras, Dr. Franck Fontanili, Dr. Jacques Lamothe, and Dr. Steven A. Melnyk
Overview
Research Methodology
Developing the Simulation Model
Simulation Practices
The Experimental Design
Data Generation
Method of Analysis
Analysis and Results
About the Authors: The Research and Review Team
APPENDIX B
An Inquiry into Queue Dynamics and Lead Times in Supply Chains
By Alfredo Angrisani
Opening a Pandora’s Box
Summary
About the Author
APPENDIX C
Why the Demand Driven Adaptive Enterprise Model Is Disruptive
By David Poveda
Defining Disruptive
The DDAE Model as Disruptive
Additional Insights About the DDAE Model
About the Author
APPENDIX D
Demand Driven Answers for Accountants
By Debra Smith and Chad Smith
Introduction
About the Questions
Webinar Questions from the Audience
About the Authors
APPENDIX E
The Story Behind Demand Driven Material Requirements Planning
By Chad Smith
Oregon Freeze Dry: The Lightbulb Moment
The Charles Machine Works: The Power of Decoupling
Jamestown Container Companies: Bringing the Solution to the Customer
Roseburg Forest Products: The Power of Vertical Integration and Shared Materials
LeTourneau Technologies, Inc.: Modern Buffer Design, Decoupled Lead Time, and the Matrix BOM Analysis
The Meeting: A Problem and Solution Come Together
Unilever: Prioritized Share, the Hybrid, Planned Adjustments, and the Birth of DDS&OP
Notes
Index
It has pleased me to have the opportunity to write the Foreword for this book. I have been fortunate to work with many outstanding people over the last 50 years. I would consider Carol and Chad to be right at the top of that group. What they have contributed to the field of supply chain management with demand driven material requirements planning (DDMRP) is probably the most significant improvement in the field in decades. MRP was made possible in the ’60s because of the power of the computer. DDMRP is now possible because of the power of the innovation that Carol and Chad have introduced. Carol and Chad are truly “thought leaders”
Having helped companies implement MRP and taught thousands of people about master scheduling, I have known for a long time that there were issues with the traditional planning systems. People have had to perform too many work-arounds utilizing spreadsheets to obtain reasonable results. Carol and Chad have found the solution to this problem and explain it extremely well in this book.
This is an important piece of work. We need to understand why the approaches that we believed in for so long were flawed. Be prepared to be amazed by the explanations in this book. I love the title that they have chosen for this book, Precisely Wrong. It says it all.
They have not stopped with just the development of DDMRP. The concepts that they have incorporated in the demand driven adaptive enterprise (DDAE) will become the standard for companies to strive to achieve.
Richard (Dick) Ling
“Your presentation and the one earlier blew my mind—I always felt there was something not right with MRP but I could never put my finger on it. I now understand why. THANK YOU!!!!”
The above quote is from a planner who attended two webinars we did in 2017; we were doing the webinars as part of our preparation for writing this book. This is a book more about a problem than a solution. The book on the solution has already been written. Demand Driven Material Requirements Planning1 was published in 2016. So, why write the book on the problem after the book on the solution?
Quite simply, we underestimated the strength of inertia across industry, academia, consulting, and software. To grasp the contents of a book about a solution, one must be compelled to open a book about a solution in the first place. The book jacket can only go so far. Furthermore, we have discovered that a commonsense solution does not sell itself. Often the nature of the problem must be thoroughly understood before one can relate to or grasp the totality of the solution.
This is our third book collaboration. The first was the third edition of Orlicky’s Material Requirements Planning?2 The second was Demand Driven Material Requirements Planning (noted above). This book fills a small but absolutely vital gap between those two works. People have known for quite some time that something is very wrong with conventional planning. In our two previous collaborations, we have talked about the disastrous effects of conventional planning on companies and people. We presented lists of problems and cited large amounts of data proving the existence of these effects. Yet something was missing— exactly why those effects occur. It is something that when revealed is so incredibly obvious but flies in the face of everything we held dear as the secret of success in planning.
Thus, this book became a requirement to systematically break down the inertia and usher in a new era of planning and execution across supply chains. So, we return to the problem to make a clear and definitive case for what to change and then discuss a framework in which successful change can occur.
Hang on to your seat. If you are a planner, supply