DDMRP: the reality beyond the acronym

Shaun Phillips is the Global Product Manager at DynaSys.

Demand Driven Material Requirements Planning

DDMRP, Demand Driven Material Requirements Planning, is a planning method used for both supply planning and execution control. DDMRP models the Supply Chain in a very unique way, defines decoupled stock positions throughout the supply chain and stocking levels. DDMRP then allows you to generate supply activities based upon real demand signals. DDMRP guides and alerts execution in a visual, intuitive way.

The buzz and the hype about DDMRP

So why the buzz and the hype? DDMRP is not a buzzword, it is not an existing spin on an existing concept. In DDMRP, the buzz comes from the unique way it triggers supply from a real demand signal. But DDMRP does draw very heavily from existing concepts such as DRP, MRP, Theory of Constraints, Just-in-time and Six Sigma.

The value of DDMRP

The value of DDMRP is in the way they can reduce absurd inventory, improve customer service levels and improve the agility and responsiveness of a planning process. However, for our customers, we have also found a high value in the simplicity of DDMRP. Once the system is configured, it is very simple, intuitive, to execute and deploy.

DDMRP is different from MRP or APS

Why is DDMRP different to MRP or APS? It comes down to two key things: decoupled inventory points and continually replenished buffer levels. DDMRP does not make the forecast, it only respond to a true demand signal.

Does DDMRP means no more sales forecasting?

Does DDMRP means no more sales forecasting? It is true that with DDMRP, it does remove the need for a SKU-based forecast. However, you need sales forecasting for more than just supply planning. You still need sales forecasting for Sales & Operations Planning (S&OP), for Capacity Planning, for long lead time material requirements planning. So yes, you will still need an element of sales forecasting however it may well be at the product family level.

DDMRP is not about the plug-and-play of a certified technology. The adoption of the demand-driven operating model requires a holistic approach. This cannot be just done in part, it requires process, talent and technology.

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