The new knowledge I will present continues on the theme of Smart Metrics and the Demand Driven Operating model we are now referring to as The Demand Driven Adaptive System. The access and creation of relevant information is governed by understanding the rules and traits of complex adaptive systems as presented in 2014. It was and is our assertion that the lack of access to relevant information is the number one constraint in supply chain organizations today and the major source of the bullwhip effect, even ahead of the use of forecasts to drive planning and scheduling.
In 2014 we focused on the "Rules” to build a Demand Driven System and revealed the 6 key Smart Metric objectives necessary to operate and sustain a Demand Driven Adaptive System. At my last presentation I focused on the three tactical metric objectives of stability, reliability and velocity.
In 2016 I will focus on the three strategic metric objectives and the Demand Driven Institute’s (DDI) recently published work defining the changes necessary to integrate the Sales and Operations Planning function into Demand Driven methodology. DDI’s articulation of Demand Driven Sales and Operations Planning (DDS&OP) creates a practical bridge between strategic business management and tactical flow management needed for today’s Demand Driven Supply Chains.
Demand Driven Sales and Operations Planning– DDS&OP is a bi-directional integration point in a Demand Driven Adaptive System between the strategic (annual, quarterly and monthly) and tactical (hourly, daily and weekly) relevant ranges of decision making.
DDS&OP sets key parameters of a Demand Driven Operating Model based on business strategy, market intelligence and key business objectives (strategic information and requirements). DDS&OP also projects the model performance based on the strategic information and requirements and various model settings.
Additionally, DDS&OP uses variance analysis based on past model performance (reliability, stability and velocity) to adapt the key parameters of a Demand Driven Operating Model and/or recommend strategic alterations to the model and project their respective impact on the business. The feedback loop process is the natural extension of how systematize living safely on the edge of Chaos to continually learn, adapt and emerge to a higher order of function. We will also include a demonstration of our newest innovation to leverage scarce resource allocation – "Prioritized Share”.
Debra Smith is the co-author of The Theory of Constraints and Its Implications for Management Accounting, (Noreen, Smith, Mackey North River Press, 1995) a grant study co-funded by the Institute of Management Accountants Foundation for Applied Research and Price Waterhouse; The author of The Measurement Nightmare. (St. Lucie Press, 2000); a co-author of The Theory of Constraints Handbook (McGraw Hill, 2010) and co-author of Demand Driven Performance – Using Smart Metrics (McGraw Hill 2013). She is the co-founder and a Partner of Constraints Management Group (CMG), a services and technology company specializing in pull based manufacturing, materials and project management systems for mid-range and large manufacturers.
Clients, past and present, include Unilever, LeTourneau Technologies, Boeing, Intel, Erickson Air-Crane, Siemens, IBM, Wellman Products Group, The Charles Machine Works (Ditch Witch), Avigilon and Oregon Freeze Dry. Debra is a certified public accountant and is also a certified expert in all disciplines of the Theory of Constraints and was elected to the founding board of the Theory of Constraint International Certification Organization. She served for six years before retiring. Prior to founding CMG Debra spent seven years as an associate professor teaching management accounting at both the University of Washington and the University of Puget Sound; nine years in industry and a CFO and a Director of finance and three years in public accounting with Deloitte. Ms. Smith is recognized internationally as an authority on both The Theory of Constraints and Management Accounting and is a noted speaker on both subjects. She has been the featured speaker at National Conventions for APICS, IMA and TOCICO as well presenting internationally in the United States, United Kingdom, Europe and South Africa.
Debra makes her home in Enumclaw, WA with her husband and partner Greg Cass, two dogs, three cats, four horses and one Malaccan Cockatoo.