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Demand-Driven MRP (DDMRP)

The Demand Driven Institute’s process framework

Position, Protect & Pull

Demand-Driven Material Requirements Planning (DDMRP) is a method to model, plan and manage supply chains to protect and promote the flow of relevant information and materials.

Protect & Promote Flow

DDMRP uses strategic decoupling points to drive supply order generation and management throughout a supply chain.

 

  1. Strategic decoupling: De-coupling the supply chain creates independence between processes or entities and is the only way to stop the bullwhip effect, mitigate variability and compress lead times.
  2. Buffer sizing: Buffer sizing is the shock absorber to ease both supply and demand variability and reduce or eliminate the bullwhip effect.
  3. Dynamic adjustments: A dynamic adjustment of the buffer profiles further calms the supply chain and smooths operating for all variabilities within a set period.
  4. Demand-driven planning: Demand-driving planning comprises generating supply orders by evaluating actual inventory, stock that has been ordered but not received, and qualified sales order demand.
  5. Visible and collaborative execution: When users have visibility into inventory through alerts that track usage, ordering lead times and material delivery can be synchronized.

DDMRP software solution

DDMRP for SAP IBP realizes the Demand-Driven MRP concept in the SAP IBP solution, SAP’s new, state-of-the-art platform for real-time supply chain planning, built on SAP HANA. The solution helps you to actively buffer planning uncertainty in inventory and create only demand replenishment signals to reduce variability propagation into supply chain and production.

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