This article is authored by BBA Department
Demand driven material requirements planning lift our operational planning…. If used properly. DDMRP is a new business word which argues that traditional ways of planning are not fit for today’s dynamic and volatile environment due to various factors. In the 1950s a method called material requirement planning changed the world of manufacturing. But times have changed. Customer tolerance times are becoming shorter and product varieties and complexities are increasing and supply chains have spread around the world. MRP is failing in these new situations. Here comes DDMRP emerging method for supply chain planning and execution in this modern era. DDMRP is a supply chain planning concept formulated by Carol Ptak & Chad Smith (demand driven material requirement planning, first edition 2016, Carol Ptak & Chad Smith) it is a concept to manage our multi echelon inventory levels and supply order generation, which argues to decrease overall inventory levels and improve customer service levels. It is done by maintaining flow stability, shorter lead times and visual planning support.
In order to create stability and shorter lead times different levels of buffer points are established which serves different purposes. It includes a safety buffer, demand in lead time buffer and order dependant buffer. DDMRP also suggests the use of various visuals for monitoring the buffer levels for material prioritizing purposes. The color coding in DDMRP allows for clear visualization of the current state of our stock levels DDMRP provides a method for order prioritization and order handling. It is a system based on the inventory point rather than the order due date. DDMRP can stabilize and enhance our planning processes so that we can increase our service levels and reduce inventories.