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The central tenet to DFT is the primacy of customer demand in daily execution of the operation. According to Aberdeen Group, "Demand driven manufacturing involves a synchronized, closed loop between customer orders, production scheduling, and manufacturing execution; all while simultaneously coordinating the flow of materials across the supply chain."
This approach speedup the BOM and routing creation process, there by help ETO companies to respond quickly to customer requirement. [citation needed] Engineer to order environments must employ a flexible and adaptive, demand-driven approach to the manufacturing process.
It takes longer for a push-based supply chain to respond to changes in demand, which can result in overstocking or bottlenecks and delays (the bullwhip effect), unacceptable service levels and product obsolescence. In a pull-based supply chain, procurement, production and distribution are demand-driven rather than to forecast.
It also takes advantage of the new demand-driven or pull-based approaches. When these two elements are combined then there is the best of both worlds; relevant approaches and tools for the way the world works today and a system of routine that promotes better and quicker decisions and actions at the planning and execution level.
Consumption, therefore, drives demand for more production, and the kanban card signals demand for more product—so kanban cards help create a demand-driven system. It is widely held [ citation needed ] by proponents of lean production and manufacturing that demand-driven systems lead to faster turnarounds in production and lower inventory ...
BTS is the dominant approach used today across many industries and refers to products that are built before a final purchaser has been identified, with production volume driven by historical demand information. [4]
Demand chain management is aimed at managing complex and dynamic supply and demand networks. [1] (cf. Wieland/Wallenburg, 2011)Demand-chain management (DCM) is the management of relationships between suppliers and customers to deliver the best value to the customer at the least cost to the demand chain as a whole.
A demand management approach to transport also has the potential to deliver better environmental outcomes, improved public health, stronger communities, and more prosperous cities. [3] TDM techniques link with and support community movements for sustainable transport .