Demand Driven MRP is a formal planning and execution method designed to correct the inadequacies and inappropriate rules of conventional Material Requirements Planning (MRP) given today’s more volatile, complex and service oriented supply and manufacturing scenarios.

Orlicky2

The DDMRP method was first fully articulated in the third and latest edition of Orlicky’s Material Requirements Planning (McGraw-Hill, 2011), co-authored by Carol Ptak and Chad Smith.

The Main Idea

Demand Driven MRP (DDMRP) builds upon the traditional replenishment approach of replacing what was taken to create a dynamic and effective pull-based solution to answer the challenges of today’s manufacturing landscape. In addition, through a new approach in materials planning and execution, DDMRP is designed to directly tie material availability and supply to ACTUAL consumption. This is a prerequisite to effectively utilize pull-based scheduling and execution methods like Lean and TOC's Drum-Buffer-Rope (DBR).

The Five Main Components of Demand Driven MRP

  1. Strategic Inventory Positioning
  2. Buffer Profiles and Levels
  3. Dynamic Adjustment
  4. Demand Driven Planning
  5. Visible and Collaborative Execution

Ensure Flow of Material

DDMRP’s use of strategic inventory buffers provides constant availability without being wasteful. Buffering raw materials and purchased components protects production from delays and reduces manufacturing lead times. Buffering key manufactured components and subassemblies further protects production from delays and further reduces manufacturing lead times. Buffering saleable items prevents loss of sales and provides the shortest possible lead time to your customers. Buffering distributed items protects from loss of sales while reducing the amount of on hand inventory needed to meet demand.

Boost Financial Performance

Consider the impact on the bottom line and the balance sheet of being able to identify the few key items for which buffering will result in reduced lead times and increased flow. Minor adjustments often lead to major performance improvements.

 

 

More Information

Visit our web page on the Demand Driven Planner Program to learn more about the program and training opportunities.

 

Visit the Demand Driven Institute website to learn more about DDMRP

Visit our web page on Supply Chain Management software to learn about software support for DDMRP.

 

Our Affiliation

Catena Strategies is DDI’s regional affiliate for the Nordics, Baltics, and Poland.

What Is This Thing Called DDMRP?

What is DDMRP? This short animated video describes the basic principles of Demand Driven Material Requirements Planning.

Thank you to our partner Demand Driven Institute for providing the video.

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