Planning in an uncertain world requires a radically different approach to traditional MRP methods that institutionalise forecast errors and order volatility. Demand Driven MRP removes the overhead of perpetually adjusting order recommendations while dispelling the myth that you just need more inventory to maintain higher service levels.
The simplicity of the Buffer Zone concept underlies a strong analytical and rigorous approach to material planning. Strategically positioned inventory is designed to decouple supply and demand in order to reduce variability whilst at the same time compressing lead times.
DDMRP delivers the answer every finance and operations manager should want to know:
How to get the right stock in the right place at the right time
Demand Driven MRP has evolved just in time to cope with modern market conditions that are here to stay.
DDMRP was introduced to the world by Carol Ptak and Chad Smith in the revised third edition of the book that kicked off MRP, Orlicky’s Material Requirements Planning.
“In the 1950s, a planning method was conceived called "Material Requirements Planning (or MRP)." MRP changed the world of manufacturing forever. But times have changed-customer tolerance times are much shorter, product variety and complexity has increased, and supply chains have spread around the world. MRP is dramatically failing in this "New Normal." Demand Driven Material Requirements Planning (DDMRP) is a practical, proven, and emerging method for supply chain planning and execution that effectively brings the 1950s concept into the modem era. The foundation of DDMRP is based upon the connection between the creation, protection, and acceleration of the flow of relevant materials and information to drive returns on asset performance. Using an innovative multi-echelon "Position, Protect, and Pull" methodology, DDMRP helps plan and manage inventories and materials in today's more complex supply scenarios, with attention being paid to ownership, the market, engineering, sales, and the supply base. This method enables a company to decouple forecast error from supply order generation and build in line to actual market requirements, and promotes better and quicker decisions and actions at the planning and execution level. DDMRP is already in use by MAJOR Global 1000 companies.”
For full details on the principles of DDMRP also see Demand Driven Material Requirements Planning (Ptak and Smith, Industrial Press, 2016)