SHELL
“ WE USE INVENTORY BUFFERS TO BREAK THE BULLWHIP EFFECT IN THE SUPPLY CHAIN , AND SPECIFICALLY IN DEMAND- DRIVEN PLANNING , WE DO NOT USE THE FORECAST TO DRIVE OUR TRANSACTIONS ”
– Nick Lynch , Global Planning Excellence Manager
By implementing strategic inventory buffers , typically in areas where inventory is already held , demand-driven planning works to decouple the supply chain , breaking down traditional MRP processes which create a bullwhip effect .
“ You see this happening where you have a slight change in demand on one end of the supply chain , and by the time that has been filtered through all of the different replenishment calculations that go all the way along the supply chain , the variation that people at the end of the supply chain feel is significant ,” explains Lynch .
“ We use inventory buffers to therefore break this effect in the supply chain , and specifically in demand-driven planning , we do not use the forecast to drive our transactions . Instead , we set up a buffer , where we wait until we have actual demand , and then make a decision based on this demand .”
Deciding to take a very different approach to that of Shell ’ s implementation of SAP in the mid- 2000s , Lynch adds that he wanted to see how the business would benefit in the face of ongoing cost pressures
14 June 2018