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 MRP
Orlicky 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/demand-chain-mana
gement-adopting-demand-driven-planning
/
• Orlicky, “Material Requirements Planning“, McGraw-Hill, New York,
1975.
• Research%20Paper/MRP%20Vs%20DDMRP.pdf