Producing only what you need, when you need it and doing so as efficiently as possible is the ultimate goal of lean manufacturing. Transitioning to a demand driven planning strategy helps you achieve just that.

This strategy is based on the original kanban method, where consumption of a material/part triggers replenishment of that part. Traditionally, this method works with minimum and maximum limits for semi-finished and finished goods, batch sizes, safety stock etc. These limits are valid for a certain period of time; then you review them and make adjustments for the next period.

Although kanban has a number of advantages in comparison with “push” production, it still cannot adjust to changes in customer demand. What does it mean? You probably produce more than is necessary, and have cash tied up in inventory. This is where the true power of a demand driven planning solution lies. Analyzing current customer demand (based on the orders for the nearest time period), it automatically sets limits that reflect the situation, and adjusts them dynamically as the situation evolves.