Implementation of Demand Driven MRP
Before we examine the issue of implementing the DDMRP method, let’s take a look at its fundamentals, which explain why we are interested in this method and what makes it so innovative. The DDMRP is based on demand management. In fact, it is through demand management, or more specifically by considering demand as a key element of supply chain management that the DDMRP method stands out. We talk about a “pull” (demand-driven) logistic flow as opposed to the previously “push” (production-driven) one.
Every company that places demand at the center of its activities should be interested in the DDMRP method. But what is its function within the company? How can it be implemented?
DDMRP within the company
The first step towards adopting the DDMRP approach within the enterprise is to create buffers along the supply chain.
These buffers, also known as stock buffers, are placed at specific strategic points within the production chain and take into consideration supply frequency, production constraints and daily consumption.
Once buffers are active, they will be monitored to ensure they do not fall below a defined critical level. This will ensure that the company’s logistics flow is optimal.
Logistics flow: the advantages of DDMRP
The DDMRP method, with its buffers, allows to reduce storage costs and to increase company productivity, reducing production interruptions and ensuring a better management of the logistic flow and of the supply chain as a whole.
Finally, the DDMRP method improves the service rate and ROI of the entire company.