Demand Driven MRP (DDMRP)

Traditional material planning and control system (ERP/MRP and distribution requirements planning systems) are systems in which detailed forecasts are used to procure needed materials and push manufacturing orders through the production and distribution system to the point of consumption. This system is typically called “Push and Promote.” These legacy rules and systems are causing enormous amounts of friction and compromises within and between manufacturers in today’s more complex and volatile supply chains.

What is Demand Driven MRP?

Demand Driven MRP is introduced in the Orlicky’s Material Requirements Planning, Third Edtion by Carol Ptak and Chad Smith. Chad Smith is the Managing Partner of Constraints Management Group, LLC.

Download a sample of the book at: www.demanddrivenmrp.com

Demand Driven Material Requirements Planning is an innovative multi-echelon pull methodology to plan inventories and materials. It enables a company to build more closely to actual market requirements and promotes better and quicker decisions and actions at the planning and execution level. The five components of DMRP are; 1. Strategic inventory positioning; 2. Buffer profiles and level determination; 3. Dynamic buffers; 4. Demand driven planning; 5. Highly visible and collaborative execution.

DDMRP places buffers strategically throughout the manufacturing and supply chain and uses actual demand conveyed by buffer consumption to pull replenishment throughout the manufacturer and supply chain. This new approach is called “Position and Pull.”

Watch the videos below to learn more about Demand Driven MRP:

Video 1: Fixing the Planning Problem

Video 2: An Introduction to Demand Driven MRP (DDMRP)