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DDMRP: An Overview Deena Dayalan THIRUPATHI

DDMRP is a demand-driven materials management system that aims to reduce inventory and increase cash flow. It evaluates where to position inventory strategically, sets buffer inventory levels, and uses dynamic adjustment and demand-driven planning to flexibly meet demand while maintaining inventory visibility and collaboration across the supply chain. DDMRP differs from traditional MRP by taking a pull-based approach informed by today's computational capabilities.

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189 views

DDMRP: An Overview Deena Dayalan THIRUPATHI

DDMRP is a demand-driven materials management system that aims to reduce inventory and increase cash flow. It evaluates where to position inventory strategically, sets buffer inventory levels, and uses dynamic adjustment and demand-driven planning to flexibly meet demand while maintaining inventory visibility and collaboration across the supply chain. DDMRP differs from traditional MRP by taking a pull-based approach informed by today's computational capabilities.

Uploaded by

javier
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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DDMRP

An overview
Deena Dayalan THIRUPATHI
Introduction
• Satisfying customers and making margins are companies’
main purpose.
• Various process are involved.
• On time delivering, reducing lead-times and thus Work In
Process (WIP), reducing costs of goods sales.
Earlier-methods
• To manage the physical and economical flow
MRP II & MRP
ERP
Pull flow policies (Production depends on real
demand and real consumptions)
Old school tools
• Before computers, EOQ (Economic order quantity) and
ROP were used in manufacturing and Inventory
management.
• Then MRP came into existent
- Polaris program (UK).
- After hearing from TMP, Joseph Orlicky
(1964) framed MRP
MRP/MRP II
• Mostly software based, hardly handily
• Production planning, Scheduling, and inventory control
system.
• Used to manage manufacturing process.
• Manufacturing resource planning – purchasing,
production and delivery department
Functionality
• Make sure about the availability of materials(Production
and delivery).
• Maintain lowest possible materials and products level
• Plan manufacturing activities, delivery schedules and
purchasing activities
Overview
MRP MRP II
• Codified in 1960s – Joseph • 1983 Oliver wight evolved
Orlicky MRP to MRP II.
• 1975 – implemented in 700 • As manufacturing resource
companies. planning
• 1981- 8,000 companies
Comparison between the
tools
Evolution of DDMRP
• 2011- third edition of Joe Orlicky’s MRP Introduced
DDMRP.
• DDMRP is a “multi-echelon materials and inventory
planning and execution solution.“, Ptak et al. (2011),
Smith et al. (2013).
• Comprises of 5 steps.
5 Steps of DDMRP
Strategic inventory position
• It evaluates from a financial point of view.
• In given working environment where to place the
inventory?
• Succeeding in positioning DDMRP buffers (Inventories)
will help a lot to correctly implement the method.
• “Improperly positioning Inventories are the major
source of failures of Supply chain companies”
Buffer profiles and levels
• The actual level of buffer has to set initially.
• A buffer is replenished according to its “Available Stock
Equation” (ASE)
ASE= inventory position – Qualified spikes.
This ASE is compared to 3 buffer alert levels
- Red – Safety stock
- Yellow - The mean in-process replenishment quantity
- Green - The replenishment size
Illustration
Dynamic Adjustment
• In the course of time for production, the materials and the
supplier may subjected to change.
• New markets open and old markets may closed.
• Dynamic inventories will help to adjust and adopt by the
company for the changes
• By adopting various methods.
Methods
Demand Driven planning
• It takes advantages of todays computational power.
• It also make use of demand driven or simply called pull
based approach.

Available stock = On-hand +On- Order


+Demand.
4 methods of Demand Driven
planning
• Supply Partner Collaboration- Collaborating with other
parts of SCM
• Forecasting - consensus forecast – Balance historical
sales to market input by various parts of SCM.
• Information Technology – Streamlines operation
• Supply Chain Segmentation – Separating SCM into
groups and work to full fill their needs.
Visible and Collaborative
Execution
• The PO , MO and TO have to be managed effectively with
the changes that often occur within the “ execution
horizon”.
• Visible and Collaborative Execution is the process by
which a DDMRP system manages open supply orders.
Conclusion
• This show that DDMRP develops properties that are
recognized to pull flow management policies.
• DDMRP appears to be pull oriented for normal demand
and push oriented for spikes.
REFERENCE
• https://www.demanddriveninstitute.com/ddmrp
• https://www.industrystarsolutions.com/blog/2016/02/dema
nd-chain-management-adopting-demand-driven-planning
/
• Orlicky, “Material Requirements Planning“, McGraw-Hill,
New York, 1975.
• Research%20Paper/MRP%20Vs%20DDMRP.pdf

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