Demand Driven MRP – DDMRP – Material Requirement Planning

Supply Chain Redesign and Performance Improvement – Zero-Based Productivity Management of Supply Chain – McKinsey Way Supply Chain Industrial Engineering

DDMRP provides theory and software for combining MRP/ERP with various improvement methods that attacked inventory to improve inventory productivity and reduce cost of production-distribution system – supply chain.

DDMRP – SUPPLY CHAIN MRP & TECHNOLOGY FOR A DEMAND DRIVEN WORLD

The mantra of DDMRP is “position, protect, and pull”.  The planning and execution steps of  DDMRP are:

  • Strategic inventory positioning
  • Buffer profiles and levels
  • Dynamic adjustments
  • Demand driven planning
  • Visible and collaborative execution.

            The five steps of DDMRP
            Jakob Björklund,  Oct 12, 2018
            https://blog.ifsworld.com/2018/10/the-five-steps-of-ddmrp/

            About DDMRP

            The term “demand driven” was introduced by PeopleSoft in 2002.  In 2007, American Manufacturing Research gave the term a re-birth by using it as a part of their “Demand Driven Value Network”.

            In 2011, Orlicky’s Material Requirements Planning (Ptak and Smith) published the first blueprint of Demand Driven Material Requirements Planning positioning it as a new demand/supply management logic.
            https://www.demanddriventech.com/ddmrp-for-beginners/

            Demand Driven MRP supply chain software

            Our Demand Driven MRP supply chain software provides next generation materials, inventory and production control planning and execution applications for global manufacturers and wholesale distributors who need to align inventory to true market demand, compress lead times, improve service levels and increase visibility across the supply chain.

            It is compatible with any enterprise ERP solution.

            https://www.demanddriventech.com/

            MEIO (enabling DDMRP concepts) – OMP Plus optimizes inventory 

            Multi-Echelon Inventory Optimization (MEIO) calculates optimal safety stock values at every echelon of the supply chain for Make-To-Stock items. To do so, MEIO extends the single-echelon safety stock logic using desired service levels, observed demand patterns, forecast and lead times, as well as their variability.
            https://ompartners.com/en/planning-functions/MEIO

            What is Demand-Driven MRP?

            A brief introduction by PMI Production Management Institute

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            Demand-Driven MRP in Short (DD MRP) has been introduced into SAP S/4 HANA with its 1709 Release.

            14 March 2019

            Key Points about DD MRP

            It’s Available in SAP From 1709
            DD MRP works on Buffer level Stock.
            It captures Spikes in Demand
            It’s only for selected Materials (high variability)
            Stock-outs & overstock will be controlled
            It supports MTS, MTO & ATO
            It’s a Combination of Pull & Push
            It’s not order based planning
            It’s not an auto driven tool requires manual interventions.
            It requires a lot of calculations and trails.
            At the moment it won’t support Fashion, Retail, VC Model

            Key Parameters of DDMRP

            Identification of material
            Maintaining Buffers
            Adoption of Sudden Spikes
            Manual Interventions
            Visible and Collaborative Execution

            https://blogs.sap.com/2019/03/24/demand-driven-mrp-part-i-over-view/

            SAP S4 HANA Logistics training Demo with explanation on DDMRP
            Parminder singh
            Published on 5 Jul 2018
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            Detailed Information about DDMRP on Demand Driven Institute Web site

            What is ddmrp?
            The FIVE COMPONENTS of ddmrp
            The INNOVATIONS OF DDMRP
            WHY IS IT CALLED DDMRP?
            Typical ddmrp results AND CASE STUDIES
            GETTING STARTED WITH DDMRP
            DDMRP Books
            DDMRP COMPLIANT SOFTWARE
            THE HISTORY OF DDMRP
            https://www.demanddriveninstitute.com/ddmrp
            https://www.demanddrivenmrp.com/
            FaceBook Page:  https://www.facebook.com/ddmrp/

            Ravi Tulsayan – Certified Demand Driven Planning Instructor in India
            https://www.facebook.com/kvssnrao/posts/10219996706934337

            Global Consultants on DDMRP

            Accenture

            A road map to demand-driven material requirements planning
            JANUARY 15, 2019
            https://www.accenture.com/us-en/insights/technology/demand-driven-material-sap

            OCTOBER 30, 2018
            Humans & machines: New supply chain planning team
            Applied Intelligence, the application of intelligent technology and human ingenuity to solve complex challenges. – Architecting the supply chain of the future.
            A lean and reliable approach, where boundaries between planning and supply chain execution diminish—we call it “Plani-cution.” Concepts like demand-driven MRP provide a path to run the supply chain solely on sales orders in real time with great automation potential.
            https://www.accenture.com/us-en/insights/strategy/supply-chain-humans-machines

            Deloitte

            A new approach to supply chain management

            When it comes to designing supply chains today, it is no longer a  one-off exercise to determine the network. Now its is dynamic engineering and optimization of  the structure as a result of  predictions of  capacities, materials availabilites and demands globally. Planning  dynamically seeks for new disruptions and tries to counterbalance impacts. Intelligent planning algorithms are developed and they do the real time planning. On the shop floor,  the traditional MRP logic is being questioned and introduction of demand driven steering mechanisms is taking plae. Supply chains are composed of  automatic transport and warehousing systems. Modern supply chain management is based on a strong and independent supply chain governance that supports self-organization and powerful IT.

            To do this on a real-time basis and efficiently,  standard ERP tools are combined  with new technology. Big data architecture complements the classical ERP landscape and makes use of IoT and AI technologies. Process mining helps to identify the relevant use cases that determine the future architecture. Systems and software are now developed in an agile way through consistent architecture cuts. IT really develops towards OT (Operations Technology).
            https://www2.deloitte.com/de/de/pages/operations/articles/digital-supply-chain-management.html

            Deloitte Exponential Supply Chain (DESC)

            SAP S/4HANA includes new key applications to improve the supply chain dramatically. These modules and others are included in the Deloitte Exponential Supply Chain (DESC), powered by SAP S/4HANA® Enterprise Management. DESC is an SAP®-certified BAiO solution that provides a set of preconfigured business scenarios that can help your organization develop a vision and evolve fast to meet new business demands.

             DESC can show you the “art of the possible” for leveraging SAP S/4HANA supply chain functions.

            • Planning: MRP Live, demand-driven, detailed scheduling
            • The Advanced Available-to-Promise (ATP) function
            • Embedded Warehouse Management (EWM) 

            https://www2.deloitte.com/ch/en/pages/technology/solutions/sap-s-4-hana-logistics.html

            February 23, 2017
            A holistic and transformative approach: demand-driven planning and forecasting
            https://consulting.ey.com/demand-driven-planning-forecasting/

            KPMG

            8 June 2018

            How demand-driven is your supply chain? In most cases, the honest answer to that is: not as demand-driven as we’d like it to be.
            Demand-driven supply chains correlate to growth
            Beginners to Leader in Demand-driven supply chain implementation to reap big increases in profit margins
            https://home.kpmg/xx/en/home/insights/2018/06/top-of-mind-2018-supply-chain.html

            2016
            KPMG’s report, Demand-driven supply chain 2.0 – a direct link to profitability, looks at how rising customer expectations are driving a new approach to the supply chain, based upon increased flexibility and agility.
            You can download the report
            https://home.kpmg/au/en/home/insights/2016/04/demand-driven-supply-chain-2-0.html

            Infographic: Demand-driven supply chain 2.0
            26 October 2016
            KPMG International’s latest paper, Demand-driven supply chain 2.0: a direct link to profitability, looks at how rising expectations are driving a new approach to the supply chain, based upon increased flexibility and agility. The infographic presents significant benefits possible
            https://home.kpmg/vn/en/home/insights/2016/04/demand-driven-supply-chain-infographic.html

            2019

            SAP Blogs on DDMRP

            February 10, 2019
            DDMRP for IBP-Inventory
            https://blogs.sap.com/2019/02/10/ddmrp-for-ibp-inventory/

            February 17, 2019
            S/4HANA Demand Driven MRP (DDMRP) Functionality
            Lingaiah Vanam
            https://blogs.sap.com/2019/02/17/s4hana-demand-driven-mrp-ddmrp-functionality/

            March 19, 2019
            Demand Driven Replenishment DDMRP in S/4 HANA- Configuration Setup
            https://blogs.sap.com/2019/03/19/demand-driven-replenishment-ddmrp-in-s4-hana-configuration-setup/

            March 24, 2019
            Demand-Driven MRP – Part I: Over View
            https://blogs.sap.com/2019/03/24/demand-driven-mrp-part-i-over-view/

            April 28, 2019
            Demand Driven Replenishment in SAP S/4 HANA-Buffer Determination and Execution
            https://blogs.sap.com/2019/04/28/demand-driven-replenishment-in-sap-s4-hana/

            Other Articles on DDMRP

            JANUARY 15, 2019

            Accenture – A road map to demand-driven material requirements planning

            Through DDMRP’s breakthrough methodology, combined with the power of SAP S/4HANA, we’ve seen clients achieve tangible supply-chain improvement that benefitted the broader business.
            https://www.accenture.com/us-en/insights/technology/demand-driven-material-sap

            2018

            July 11, 2018
            ATLANTA–(BUSINESS WIRE)–Demand Driven Technologies (DD Tech), the leading provider of Demand Driven MRP compliant supply chain solutions, today released a series of new innovations for their Replenishment+® NetSuite (R+NS) supply chain solution. Natively-built for Oracle NetSuite, the innovations enable manufacturers and distributors to have unprecedented visibility into supply chain execution and improvement in inventory management.

            “These new innovations bring powerful Demand Driven MRP principles to our native NetSuite solution, making supply chain planning and execution easier and more efficient”
            https://www.businesswire.com/news/home/20180711005412/en/Demand-Driven-Technologies-Releases-New-Supply-Chain

            Michelin Selects Demand Driven Technologies Replenishment+ to Improve Supply Chain Planning and Execution
            BY BUSINESS WIRE
            JUNE 12, 2018
            http://www.sys-con.com/node/4280311

            Why Successful Supply Chain Digitalisation will have to include Demand Driven MRP
            March 26, 2018
            Simon Eagle
            Supply Chain Transformation at Rotork
            https://www.linkedin.com/pulse/why-successful-supply-chain-digitalisation-demand-driven-simon-eagle/

            OPEN ACCESS
            Effective production planning for purchased part under long lead time and uncertain demand: MRP Vs demand-driven MRP
            IOP Conference Series: Materials Science and Engineering, Volume 337, conference 1, 2018
            https://iopscience.iop.org/article/10.1088/1757-899X/337/1/012055/meta

            2017

            Demand-Driven Supply Chain Management: Transformational Performance Improvement
            Simon Eagle
            Kogan Page Publishers, 03-Apr-2017 – Business & Economics – 280 pages
            Many manufacturing and distribution companies are moving from the traditional ‘forecast push MRP’ to demand-driven supply chain management (SCM). Demand-driven SCM is an ‘end-to-end’ supply chain planning and replenishment process that enables companies to achieve their planned service levels from up to half the average level of inventory and requiring significantly less throughput capacity – irrespective of the level of demand volatility or lead-time length.

            Demand-Driven Supply Chain Management is the go-to source for industry supply chain/operations executives and students. It describes the ‘what, how and why’ of the demand-driven SCM process. The key themes in the book are: what is demand-driven? why is demand-driven so effective? how to operate a demand-driven supply chain? and how to adopt the demand-driven process in your company? Readers can quickly grasp the essential concepts from one of numerous self-contained sections that present the book’s key concepts from different perspectives. Online resources available include full-colour figures.
            https://books.google.co.in/books?id=RkqFDgAAQBAJ

            Demand-Driven Material Requirements Planning (DDMRP) – The new paradigm in Supply Chain Planning
            Today’s challenges in supply chain planning
            https://www.camelot-itlab.com/en/company/press-releases/press-articles/demand-driven-material-requirements-planning-ddmrp-the-new-paradigm-in-supply-chain-planning/

            Posts by Rui Pedro Dantas in SAP Blogs in 2016 on DDMRP

            Demand-Driven MRP – Part I: Introduction
            https://blogs.sap.com/2016/06/20/demand-driven-mrp-part-i-introduction/

            Demand-Driven MRP – Part II: Why is DDMRP needed?
            https://blogs.sap.com/2016/08/01/demand-driven-mrp-part-ii-why-is-ddmrp-needed/

            Demand-Driven MRP – Part III: Strategic Inventory Positioning
            https://blogs.sap.com/2016/08/22/demand-driven-mrp-part-iii-strategic-inventory-positioning/

            Demand-Driven MRP – Part IV: Buffers
            https://blogs.sap.com/2016/08/31/demand-driven-mrp-part-iv-buffers/

            Demand-Driven MRP – Part V: Buffer Adjustments
            https://blogs.sap.com/2016/09/12/demand-driven-mrp-part-v-buffer-adjustments/

            Demand-Driven MRP – Part VI: Planning
            https://blogs.sap.com/2017/01/16/demand-driven-mrp-part-vi-planning/

            2015

            Interpreting and Applying Demand Driven MRP: A Case Study

            PhD thesis by Mathias Ihme
            Nottingham Trend University, 2015
            irep.ntu.ac.uk/27704/1/Mathias.Ihme-2015.pdf

            DDMRP Research Papers and Theses

            2019
            Demand Driven MRP: assessment of a new approach to materials management
            Romain Miclo, Matthieu Lauras, Franck Fontanili, Jacques Lamothe
            International Journal of Production Research
            Volume 57, 2019 – Issue 1
            We evaluate its effectiveness relative to two other widely accepted approaches – MRP II and Kanban/Lean production – through a series of structured computer simulation experiments. The results strongly indicate that DDMRP does represent a superior approach – one that warrants further academic study.

            2018
            Material management without forecasting: From MRP to demand driven MRP
            Alaitz Kortabarria, Unai Apaolaza, Aitor Lizarralde, Itxaso Amorrortu
            Journal of Industrial Engineering and Management
            Vol 11, No 4 (2018)

            The present analyzes the implementation of DDMRP in a real company. The results clearly show that using DDMRP the company increased visibility in the supply chain. In addition, the inventory level was reduced by 52.53% while material consumption was increased by 8.7%. These results were achieved while maintaining the high service level.
            Download the paper from:
            http://www.jiem.org/index.php/jiem/article/view/2654

            Updated on 30 May 2019, 26 May 2019