ARE YOU READY FOR THE NEXT LEVEL?
There is an inconvenient truth with the world of Supply Chain Planning. MRP, the primary function of almost all ERP and APS solutions, is not ‘delivering the goods’ anymore. The fact that planners spend a large amount of time augmenting their MRP solution with Excel spreadsheet based calculations and ‘best endeavors’ in an attempt to stay in control of supply and production planning is an obvious sign that something is not right.
Is it not time to make a change? Can a concept introduced over 60 years ago that has fundamentally not changed still be relevant in today’s complex, global supply chains?
At B2Wise we are working to change the way organisations plan and radically improve the performance of their businesses.
DDMRP – A NEW WAY
This is achieved by leveraging a new planning concept called Demand Driven Material Requirement Planning or DDMRP for short.
DDMRP is fast growing and its loudest supporters are not consultants or software vendors, but hardened business professionals that have transformed their supply chains. Its methodology is built on the principle that if you protect and promote the FLOW of relevant information and materials, you will maximise the Return on Investment.
DDMRP is a method to model, plan, execute and manage supply chains. It combines elements of MRP, DRP, Lean, Theory of Constraints, Six Sigma with some smart new innovations to Position, Protect and Pull inventory through the supply chain.
MAIN COMPONENTS OF DDMRP
DDMRP is built on the principles that an optimally performing supply chain needs to be driven by the flow of real demand signals and must not allow volatility to be passed up and down the supply chain. The 5 main components of DDMRP are
Source: Demand Driven Institute
DDMRP allows businesses to sense changing customer demand, whilst dynamically adjusting supply planning and production. DDMRP is the modern answer to the complexity of the modern manufacturer or distributor.
WHERE TO APPLY DDMRP IN YOUR BUSINESS?
DDMRP is an end-to-end multi-echelon solution which is applicable in both a simple and complex supply chain. It is highly effective on
- Short and long lead time purchased parts
- Manufactured, sub-assembled and critical non-stocked manufactured parts
- Finished inventories within the distribution environment
DDMRP gives you end to end visibility of your supply chain from both a planning and execution perspective, allowing for metric alignment across departments and business hierarchies.
REAL WORLD RESULTS
The results being achieved by companies that have implemented DDMRP are staggering
- 10 to 30% improvements in service levels
- 25 to 60% reductions in inventory
- 40 to 70% reductions in Work in Progress
- Over 50% compression of lead time through manufacturing
- 0 changes to the production schedule
Other benefits commonly reported include
- Significant cash flow improvements
- Reduction in minimum order quantities
- Reduction of company-wide variability in demand, supply, operations and management
- A visual management system that easy to understand and is self-leaning
- Upskilling of staff and improved staff motivation.
- Better control
And now imagine achieving this without needing a high accuracy forecast!
These results have been achieved across a wide range of industries including Aerospace, Biotech, Pharmaceutical, Consumer products, Electronics and Technology, Forging, Steel & Machining, Petrochemical, Make to Order manufacturing, and Mixed Mode (MTS/MTO) manufacturing amongst others.
A library of video case studies and white papers can be found on the DDI website www.demanddriveninstitute.com/case-studies