Value and Results
Companies that implement DFT are typically looking for an improvement in the response to customer demand. This is reflected in the lead-time or replenishment time for finished product and will affect the level of inventory that is held to buffer response requirements. Effective response to demand can be described as a distribution curve, with some orders taking longer to fill than others. The result is variation and uncertainty in the manufacturer’s ability to serve the market. Working capital is required to hedge this response lag and uncertainty.
DFT aims to reduce both the variation and duration of response to demand. This can be seen as a more capable fulfillment that provides a higher level of customer service at a lower level of working capital. The intended results are improvement in delivery performance together with increased cash-flow and return on working capital.
Read more about this topic: Demand Flow Technology
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