Demand Driven Material Requirement Planning (DDMRP)

What is DDMRP

DDMRP is a relative new concept to many. It is a method, defined in 2011, to model, plan and manage supply chains to protect and optimise the flow of information and materials. DDMRP uses strategic decoupling points to drive supply order generation based on re-order point concept and manage the flow throughout a supply chain. It has four principles:

• Demand Driven – by real orders instead of by forecast
• Flow Based Planning – by focusing on optimizing the net flows
• Dynamic Buffers – by defining buffer zones
• Operational Planning – by considering lead time horizon in ranges

Why DDMRP

Why DDMRP MRP was invented in 1950s and are still active in use today. If your MRP is fueled by forecast, then the following phenomenon might not sound strange to you - chronic shortage, excess inventories, high operational cost, and manual spreadsheet planning.

While DDMRP can lead to significant improvements in these dimensions. Many companies are looking to improve their short-term operational production planning and create a better link to tactical planning and S&OP. With the Demand Driven Material Requirement Planning (DDMRP) method being an a approved proven way to make significant improvements such as:

• Increase Service Levels – by up to 20% 
• Reduce Inventory – by up to 40% 
• Compress lead time – by up to 50%

As the result, it reduces the total supply chain cost and relieve the nervous of planning. 

The Journey to DDMRP

It can be tricky to understand the DDMRP concept even for people with many years of experience. We therefore suggest an approved journey to DDMRP with a simple start, suit for purpose evaluation, a pilot rollout and then scale up approach.

We provide the Starter Kit to help you capture the DDMRP concept in a thorough and easy to understand way. It helps you gain the insights into DDMRP, surface the advantage and benefits which facilitate the buy-in of the operation organization.

• DDMRP webinars
  Get introduced to the concept and learn more about DDMRP
• DDMRP game
  Join the game together with your colleagues and gain insight into the characteristics of the concept
• DDMRP simulation
  Run a DDMRP simulation with our simulation tool, which can estimate how DDMRP will affect inventory and service levels in your company.

After you gained the solid understanding on the concept, we can also support you with end-to-end implementation. 

• Proof of Concept
  We will support you make a proof of concept in excel to demonstrate how it will work for your company and illustrate the improvement area.
• Tool selection
  With an in-depth knowledge and experiences on most of prevalent systems in the market (e.g. SAP S/4HANA, SAP IBP, Kinaxis, o9, etc.), we can help further on the tool selection based on your needs, capability, and tools characteristics.
• Tool implementation
  Our mantra is being your trusted implementation and/or transformation partner, to advise and help execute with a holistic view to ensure the DDMRP adoption and embedment in your organization.