DDMRP Demand Driven MRP

Traditional material planning and control systems (ERP/MRP and distribution requirements planning systems) are systems in which detailed forecasts are used to procure needed materials and components. The system pushes manufacturing orders through the production and distribution system to the point of consumption. This system is typically called “Push and Promote”. These legacy rules and systems cause friction and compromises within and between manufacturers in today’s volatile and more complex supply chains.

 

Partners

We collaborate with the demand driven institute to deliver high-quality DDMRP training. We work in close cooperation with B2Wise and DDtech to help companies implement DDMRP in their manufacturing facilities and across their supply chain.

The problem

Most Purchasing and Materials Managers feel like they are caught between a rock and a hard spot. Shortages of critical items must be eliminated while at the same time the market demands s short lead time while supply chains grow longer and availability of materials is not always guaranteed. In today’s economic climate this conflict is more urgent than ever.

Unfortunately, most of the today’s available tool sets are insufficient to effectively resolve this conflict in the face of increasing demand and supply volatility and variability. Learn about the shortcomings of tools like MRP and Demand driven MRP is based on the best attributes of Six Sigma, Lean, TOC and MRP. This integrated but still intuitive approach will give lower inventories, better customer service, better use of capacity and lower supply chain risk.

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DDMRP helps

The demand driven institute developed DDMRP as a new way to aid the supply chain. They combined the five components from Material requirements planning, six sigma, Lean and the theory of constraints to enhance the traditional MRP. The main drive of DDMRP is flow. The concept of flow is that, when products are moving through a supply chain, they add value. The way to promote flow within the supply chain is by utilizing flow protection. These protections are the so-called buffers.

Buffer

A buffer is a vital part of DDMRP and is designed to protect and pull on the supply chain. The innovations of the buffer helps to replenish and control the supply chain using a pull system. Because we operate a complex supply chain system, we need to manage the production disruptions and chaos that this system creates. When a buffer is in place, it will decouple the lead time and variation at that certain point. The decoupling will protect from the variation on both the supply and the demand sides. Decoupling is done with these critical items that are needed for production.

Buffers can be used to accomplish the following tasks:

  • Customer tolerance time

  • Market potential Lead Time

  • Sales Order Horizon Visibility

  • External Variability

  • Inventory leverage and flexibility

  • Critical operation protection such as a bottleneck

ddmrp buffer propogation

Order generation

Within demand driven material requirements planning, the supply orders are generated by actual demand. Production only starts when there is a customer order. This order is propagated down the various buffers. Inventory buffers, use other inventory buffers to order materials from. These orders are being used by the software to pull the desired materials through the supply chain and between the buffers.

ddmrp buffer adjustment

Dynamic replenishement

When the interest in a product grows or shrinks, the supply chain has to adapt to accommodate this. The demand driven institute came up with the ADU, Average daily usage. This number is the center of DDMRP and is used to plan buffers, decide on order quantities and calculate using the desired order interval. Other factors that are used include supplier reliability, lead time, and minimum order quantities. When the demand for a product increases, the buffer inventory grows accordingly, when the daily demand is lowered, the buffer will shrink.

When DDMRP helps

Companies that use ddmrp for their planning and inventory management notice a number of advantages. The most common one is less supply chain stress. This means that there are less disruptions and exceptions and the planner is able to improve the system.

30-45%

Optimal inventory investment

97-100%

On time in full order fulfilment

80%

Shorter lead times

DDMRP is more then MRP

When a companies want to introduce buffers and DDMRP logic into there system, this is a fairly easy process. However this buffer inventory is not deployed as part of common ERP systems and special software is needed to implement DDMRP. We, from Visie Partners have multiple partners that we collaborate with to start your demand driven material requirements planning journey. More info about the services we can offer, can be found on demanddriven.nl, our own website dedicated to demand driven material requirements planning.

Education

To learn more about DDMRP and to learn the simple way that the systems operates, check our learning offers below. Experience with DDMRP is not a requirement, the course is also applicable for planners that work with Demand Driven in their daily work

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2 days Sessions
30 | 50 hours
€ 1.495,- excl. VAT and exam

DDMRP Planner

This course makes you question the traditional way of inventory planning and control MRP. It covers topics on how to reduce stocks by creating buffers where they contribute most to absorbing variation and protecting the flow time (flow). As a student, you learn methods for actively controlling the volume of buffers based on the size and variation of the demand and the lead times in production and purchasing.

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2 days Sessions
60 hours
€ 1.495,- excl. VAT and exam

DDMRP Leader

The Demand Driven Leader (DDL) course teaches you how you can use the Demand Driven Operating Model, and how you can apply it's principles when you wish to analyze and evaluate your business.

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Questions? Contact us:

Phone:  +31(0) 85 401 3474
Email address: [email protected]

COC number: 71052208

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