Fixing planning in the VUCA world

Carol Ptak and Chad Smith
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Carol Ptak: Demand Driven Institute, USA
Chad Smith: Demand Driven Institute, USA

Journal of Supply Chain Management, Logistics and Procurement, 2024, vol. 7, issue 2, 158-179

Abstract: The essence of any business is flow. The flow of materials and/or services from suppliers — perhaps through multiple manufacturing plants and then through delivery channels to customers. The flow of information to all parties about what is planned and required, what is happening, what has happened and what should happen. The flow of cash returns from the market to the organisation and through to the suppliers. This paper makes a critical connection between the concept of flow and the material requirements planning (MRP) inputs, processing logic and assumptions and introduces a necessary change in processing logic to address the challenges companies experience today. The true purpose of planning — to promote and protect the flow of relevant information and materials — was the driving purpose behind the development of MRP. Throughout this planning and information system evolution, MRP’s basic requirements, assumptions and processing logic have remained unchanged. Despite newer and more powerful planning, and control applications powered by cloud-based infrastructure, the basic approaches to planning manufactured and purchased items have remained largely a constant since the 1960s. This paper proposes an innovative pragmatic proven methodology that enables a company to successfully sense and adapt to changes in the volatility, uncertainty, complexity and ambiguity (VUCA) world.

Keywords: flow; demand driven; DDMRP; planning; VUCA world; decoupling (search for similar items in EconPapers)
JEL-codes: L23 M11 (search for similar items in EconPapers)
Date: 2024
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