Business Automation and Software Blog

Demand-Driven Manufacturing That Drives Profitability (part 2)

Posted by Robert Baran on Wed, Sep 13, 2017 @ 11:00 AM


How to Plan for Lean Manufacturing Success

Welcome back to our series on demand-driven manufacturing. In our first article, we looked at how lean manufacturing principles, applied to demand-driven manufacturing, along with the right software help companies identify winning strategies to trim losses and improve productivity. In this article, we’ll take a look at “demand-driven planning”, an important part of demand-driven manufacturing.


What Is Demand-Driven Planning?

Demand-driven planning is the art of planning for customer demand. It can be difficult in demand-driven manufacturing to predict with any level of accurate customer demand. Forecasting is an art and a science and takes into account customer actions and other business intelligence at hand. Fortunately, with SYSPRO you can use the system to help you with demand-driven planning.

In a make-to-order environment, demand variability can make planning a real challenge. Unless you have long-term contracts with customers, it’s hard to know what’s on the horizon in the next month, quarter, or year.

Some manufacturers respond by carrying higher than optimal levels of inventory in a “just in case” move that can add product and overhead costs while reducing profits. This goes against lean manufacturing principles, which encourage manufacturers to make only what is ordered or take a demand-driven approach to manufacturing that cuts out excess. How do you balance the need to respond promptly to unknown sales levels without adding extra inventory?

The answer lies in the data. SYSPRO software provides accurate, real-time data and forecasting tools that can help you predict demand. You can then form a strategic vision based on data to plan ahead.

Demand-Driven Opportunities

Together with demand-driven planning are demand-driven opportunities. Internet-based sales through an active e-commerce model can help manufacturers manage demand and integrate lean manufacturing principles into their operations.

The internet helps you communicate faster and better with your customers. Integrated e-commerce and warehouse solutions can provide customers with accurate updates on the status of their orders as well as the stock status of standard inventory items. Fast, rapid communications with your customers build better relationships.

Manufacturers can also use the internet to search for raw goods and components at the lowest possible prices. This, in turn, supports lean manufacturing principles. You aren’t keeping excessive materials on hand to fulfill orders, and you’re reducing costs while improving efficiency.

Improving Customer Satisfaction

Along with demand-driven manufacturing comes an increased need for customer satisfaction. You can enhance customer satisfaction using a variety of tools at your disposal.

  • Internet self-service portals enable customers to place orders, review in-progress orders, and track shipping without having to wait for a call or an email back from your team. They provide customers with a sense of control over their order while improving communications.
  • Using the data in your system, you can proactively reach out to customers with ideas that will help them lower costs. For example, consolidating smaller orders into one larger order can help them save money if you can lower costs with higher production runs. These and others ideas may be appreciated by your customers which results in greater loyalty to your company.

Demand-driven planning, along with lean manufacturing principles, can help you control costs, reduce inventory, and improve customer satisfaction. To do so, however, you will need the right tools.

SYSPRO software provides a robust system for improving and enhancing communications throughout your company. The shared data throughout the system enables better decision making and control over costs. Scalable, mobile and reliable, SYSPRO provides you with the tools you need to implement lean manufacturing principles in a demand-driven manufacturing environment.

PositiveVision Offers the Tools You Need for Demand-Driven Planning

For more information on SYSPRO ERP, visit PositiveVision. PositiveVision provides consulting and services to manufacturing, warehousing, and distribution companies. SYSPRO automates many businesses processes and can help you improve communications with customers, among other benefits. With the right data, you can better manage your business. Learn more on our website or contact us today.


Topics: lean manufacturing, SYSPRO