Analyzing and evaluating product demand interdependencies

Demand-driven manufacturing is an extremely unstable planning environment compared to forecast-driven manufacturing. This requires preparation and makes knowledge of demand behaviour even more important for planning and control. The basic assumptions of pre-ante allocation based on forecast of independent end-products demand are critical for manufacturing planning and control in general. However, the importance is higher for demand-driven manufacturing than forecast-driven manufacturing. This is due to the sensitivity of demand-driven manufacturing to demand fluctuations, e.g. time and interdependency of demand rates, due to the customer order decoupling point.This paper presents a method to establish time and interdependency of demand rates (the Time- and Interdependent Demand Rate Method), which can improve the planning and control performance as well as the order management performance in a MTO environment. The method is tested on data from two cases. For both cases results and demand planning implications are presented. Use guidelines for the method are also presented along with avenues of further research.