Dealing with short term demand changes! No “on-size-fits-all” solution!

April 13th 2017, the second High Tech Equipment supply chain event took place at Croy Castle. As preparation for this event an interview with 16 companies was executed to collected the best practices. Companies participating were: ASML, Philips Healthcare, Océ, FEI (Thermofisher), Marel, Lely industries, AGCO corporation, Bosch security,  VDL ETG, NTS, Neways, Xycarb ceramics, NEC, UTC Fire & Security and Avnet.

In the survey held by EyeOn questions were asked about how the participants deal with short term demand changes. All changes with a significant impact on the supply chain were researched. A striking finding is that a bit more then halve of the demand changes, 55%, with significant impact on the supply chain originates from its customers. The internal organization is responsible for 45% of the demand changes. The source of the latter category is amongst others in the area of MRP changes, development, purchasing , planning and last but not least sales and finance.

During the discussions it became clear that incentive schemes and organizational culture are an important driver behind the behavior of lack of linearity in ordering patterns. The case presented by Philips showed however that it is very well possible to make significant steps in driving to more linearity.

During the session the collected best practices were discussed. It became clear that there is no “one-size-fits-all” solution in dealing with short term demand changes but that many best practices are an inspiration for companies to start reviewing and improving their own processes.

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