The DDMRP method: demand-driven thinking
Demand Driven Material Requirement Planning (DDMRP) is a method based on demand-driven supply chain management. This recent methodology follows the traditional Material Requirement Planning (MRP) method, which controlled material and component requirements according to the production load.
The Supply Chain is undergoing many upheavals that require resilience and vigilance from companies. Therefore, it needs forecasts to manage its stocks and steer its flows, but these forecasts obviously do not guarantee optimal management. Companies are weak when they confront out-of-stock situations, surpluses, restocking or even the "Bull-Whip" effect, a weakness of the MRP method in which one goes from an out-of-stock position to a strong surplus.
In need of a more complex and sophisticated methodology, DDMRP takes action and includes demand in the management of its production flows to counter the risks that companies face in volatile markets. This methodology implements intermediate stocks or buffers at different stages of the production chain.
DDMRP has five key steps:
The DDMRP method is relevant when the company is positioned on markets with volatile demand and long supply times. MRP is essential to evaluate and share customer needs between buffers. Yet, DDMRP controls these buffers and becomes more agile.
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