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Demand driven planning

Producing only what you need, when you need it and doing so as efficiently as possible is the ultimate goal of lean manufacturing. Transitioning to a demand driven planning strategy helps you achieve just that.

Producing “just in time” is also of the underlying principles of the original kanban method, where consumption of a material/part triggers replenishment of that particular part. Traditionally, this method works with minimum and maximum limits for semi-finished and finished goods, batch sizes, safety stock etc. These limits are valid for a certain period of time. Then you review them and make adjustments for the next period. 

Although kanban has a number of advantages in comparison with “push” production, it still cannot adjust to changes in customer demand. What does it mean? You probably produce more than is necessary, and have cash tied up in inventory. 

This is where the true power of a demand driven planning solution, such as Production Control by Productoo, lies. Analyzing current customer demand (based on the orders for the nearest time period), it automatically sets limits that reflect the situation, and adjusts them dynamically as the situation evolves. This is what we call dynamic material replenishment. 

Besides customer demand, Production Control takes the following variables into account when when creating the production plan:

  • current stock availability of parts
  • required coverage of materials (including e.g. safety stock)
  • optimal batch size for the production of materials

What are the benefits of demand driven planning? 

  • no more overproduction 
  • stock/inventory levels optimization
  • just-in-time production
  • right-size/optimal batches

How can you optimize your planning with Production Control?

The system checks new customer orders and distributes them to the right (and available) production lines based on the required finish date. It notifies you of current and future material shortage. Then it breaks down all the finish goods according to the bill of material and creates the plan for all the workcenters involved in the upstream process.

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