You have taken action to ensure your manufacturing operations can respond to changes in market demand
Changes in demand are a market characteristic, driven by several factors, some of which cannot be influenced by the company. These changes can provide commercial opportunities for those companies able to respond quickly   
Key Issues
·         Markets today are driven by customers wanting more choice. This increases your product variety and reduces volumes of each product type
·         Some fluctuations in demand are predictable e.g. seasonal demand or launching new products.  It is possible to design your supply chains to accommodate this. You should consider the following:
o     Information on customer demand must collected and shared, for predicting:
o      Product life cycles
o      The expected demand for purchasing materials
o      The expected production volumes to satisfy customer demand
o      Techniques for predicting factory and supply chain capacity must be reliable, with established, cost effective ways of making adjustments
o      Predictable changes should be planned for by assessing risks and volume sensitivity, and communicating any proposed actions across supply chains
·         Responding to unpredictable demand fluctuations needs more flexible plant and equipment that can accommodate changes without significantly increasing the cost of manufacture:
o      Equipment you use for manufacturing must be capable of producing a family of components with very fast changeover times
o      Lead times for manufacture must be reduced to improve responsiveness to changes, improve the flow of materials and reduce levels of work in progress
o      Your people must be trained to undertake a number of different tasks
o      Management time, resources and training must be devoted to developing rapid process change without disruption to production
o      Shift patterns and working arrangements should be agreed to ensure that key workers are trained and will be available to satisfy actual demand
o      Suppliers must also be able to respond fast and maintain quality standards
o      Many businesses have introduced a combination of full and part time workers to enable them to flex capacity more easily
·         Long supply chains may find it harder to respond to sudden fluctuation
Factors for Success      
Factors to  Avoid
1.     You encourage communications across your supply chains, avoiding surprises
2.     You invest in process-capable equipment that provides flexibility and reliability 
3.      introduce multi-skilled teams able to undertake a variety of tasks
4.     You ensure that parts flow without interruptions
1.     Releasing additional orders without considering their impact on capacity
2.     Adopting rigid working arrangements
3.     Expecting production volumes to be flexible without investment or training
4.     Excessive over production and storage in anticipation of increased demand
Who does this apply to?
Operations managers, their support teams and shop floor teams
Realisable Benefits
Respond more quickly to customer demand, release cash from the supply chain


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