Supply chain 4.0 : a smarter supply chain
Supply chain 4.0 is an emerging concept for a more secure, faster and more flexible supply chain. This is achieved by integrating technologies such as artificial intelligence, Big Data and Machine Learning into the existing process.
Productivity and efficiency can also be improved through production and inventory management methods. These include Lean Management solutions such as the DDMRP method or the Value Stream Mapping (VSM) tool. In this article, we will detail what is behind these tools.
The DDMRP method : Demand Driven Material Requirement Planning
The DDMRP method is a tool for demand-driven supply chain management.
History : The DDMRP method was born in the United States in the 2000s and is derived from the MRP method (Material Requirement Planning), which was based on the management of the supply chain by the production load. The DDMRP method is based on the opposite concept : it is demand that drives the supply chain. This change of method is the result of the increasing volatility of demand since the end of the 1990s. As excesses or stock-outs became more and more common in companies, managers adopted the concept of demand-driven flows, no longer driven by production.
The main objective of this method is to optimise stock management according to market demand. The aim is therefore to keep stock levels as low as possible, in order to reduce storage costs and production shortages as much as possible. It also aims to stabilise flows, so as to avoid variations in the supply chain and thus gain in flexibility and productivity.
This is achieved by introducing buffer stocks at strategic points in the supply chain. The implementation of this tool is generally done in 5 steps :
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Strategic positioning of buffers
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This step consists of defining the key points for setting up the buffers.
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Calculation of buffer levels
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Here we characterise the demand and choose the best parameters to customise the volume of each stock according to the actual consumption.
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Response to the request
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Following on from the second, this stage consists of adapting to seasonality or to the various events likely to cause demand to vary.
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Planification
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Planning refers to the management of the replenishment of buffer stocks according to changes in demand.
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Execution
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This step consists of monitoring the variations in buffers, taking into account the work in progress, future needs and urgent orders.
For more information on this method, and in particular to find out whether it can be applied to your company, you can also read the article DDMRP: everything you need to know about flow planning.
The VSM tool: Value Stream Mapping
Value Stream Mapping is a process map that makes it possible to identify all the activities produced by a company. This mapping represents the interaction between the flow of information and the flow of goods. It therefore makes it possible to identify tasks with low or high added value, and thus to determine which tasks should be eliminated and which points of the process should be improved.
More specifically, the following information is included in the mapping :
- The details of the customer request,
- The flow of information, circulating between the production manager and the production line,
- The physical flow of the product, which corresponds to the stages of the production line,
- A timeline detailing, among other things, the waiting times between the different stations.
To go further, you can find out how to carry out a Value Stream Mapping in our article The usefulness of Value Stream Mapping for a performant company.
And there are many other tools available!
The DDMPR and Value Stream Mapping methods, as we have seen, enable us to eliminate waste in order to produce better and sustainably, by placing the customer at the centre of our concerns. There are many other Lean Management tools that also enable process improvement. Amongst those you should definitely know are the 5S method or the Six Sigma method.
You can find many others on our blog zozio.tech, and in particular on the article: Lean Manufacturing: discover the essential tools and methods.
Written by Emma Guignard
