How Manufacturers can optimize their supply chain strategy with Demand Driven MRP (DDMRP)
Demand Driven Material Requirements Planning (DDMRP) helps you bring order to the most intricate part of daily manufacturing operations – supply chain management. It helps you avoid the production errors, delivery delays, and increased labor and transportation costs that damage your reputation and bottom line.
Is it time to ditch the Excel spreadsheet?
Supply chain management enables you to meet customer demand. It manages the production and delivery time it takes to get products to the customer. Ensuring that your supply chain management processes perform flawlessly and efficiently is critical to customer satisfaction, and the cornerstone of any successful manufacturer.
Supply chain automation accelerates the rate at which this all happens. However, many small to medium-sized manufacturers in particular look upon automation as a daunting task. Instead, they rely on outdated, manual processes, especially that old standby, the Excel spreadsheet.
While spreadsheets are free and work well for small tasks, they are not suitable for managing more complex order fulfillment, inventory, and supply chain management processes. According to Ventana Research, 90 percent of spreadsheets with more than 150 rows contain errors.
What is DDMRP?
Demand Driven Material Requirements Planning (DDMRP) is the missing link between MRP and Lean Manufacturing. Many leading organizations have adopted DDMRP as the optimum solution for planning for their production needs, while strategically streamlining inventory and keeping costs down.
DDMRP includes planning and execution innovations, and uses advanced supply chain management software to improve lead-time compression and execution visibility. It takes Lean’s waste reduction focus and visibility for execution, and combines it with a new set of demand-driven planning tactics to generate clear planning visibility across an enterprise and supply chain.
What are the benefits for your supply chain strategy?
DDMRP methodology works with existing ERP systems to better plan for, and meet, market expectations by:
- Reducing reliance on forecasts
- Eliminating shortages
- Solving availability problems with Lean implementations
- Working with complex Bills of Materials
- Reducing inventories while improving customer service
- Compressing lead times
- Allowing for an integration path with traditional master planning and S+OP processes
The five elements of DDMRP
Here’s how DDMRP works to solve today’s supply chain process challenges and help optimize your supply chain strategy:
- STRATEGIC INVENTORY POSITIONING: Identify the position in the supply chain where you should hold inventory to provide the maximum performance.
- BUFFER PROFILES AND LEVELS: Set your inventory levels by establishing profiles for the buffer stock based on their variability and volume.
- DYNAMIC ADJUSTMENTS: Buffers that respond to variations in the initial buffers, such as demand patterns or variables, including seasonality.
- DEMAND DRIVEN PLANNING: Shift to a sales order driven planning method that creates resupply signals based on the available stock status of each buffer and gives prioritized sequence based on actual need.
- EXECUTION AND DDMRP BENEFITS: Use supply chain management software to gain easy, real-time access to your inventory through, allowing you to benefit from improved customer service, reduced lead times and costs, and other advantages.