Where is my MPS? DDMRP: A Game Changer for Planners
In the dynamic landscape of modern supply chain management, the advent of Demand Driven Material Requirements Planning (DDMRP) stands out as a revolutionary paradigm shift. Unlike traditional planning methods, DDMRP does not rely on a Master Production Schedule (MPS). This fundamental difference is not just a departure from the norm but a strategic adaptation to today’s fast-paced and unpredictable market.
Understanding MPS in Traditional Planning
Traditionally, the Master Production Schedule (MPS) is a cornerstone in supply chain planning. It schedules the production of finished goods to meet forecasted demand. However, the MPS model struggles in our VUCA world. It's rigid, heavily reliant on forecasts, and leads to excess inventory or stockouts due to its inability to quickly adapt to real-time demand changes.
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DDMRP's Approach to Planning
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DDMRP stands apart by not relying on an MPS. Instead, it focuses on strategic decoupling points and buffer management. These decoupling points are carefully placed to protect the flow of goods and materials, ensuring a more responsive and resilient supply chain. Unlike MPS, which is a fixed schedule, DDMRP dynamically adjusts to market changes based on actual consumption.
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Benefits of DDMRP's MPS-Free Approach?
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Real-World Implications for Planners?
In a DDMRP-driven environment, the role of planners evolves. They become more agile, focusing on monitoring buffer statuses and addressing exceptions. A case in point is Sames Kremlin, which transitioned to DDMRP and saw a 40% reduction in inventory levels while achieving near-perfect customer service levels. Planners at Sames Kremlin now spend less time juggling with schedules and more on strategic initiatives.
Conclusion
DDMRP’s departure from the traditional MPS model is a significant leap forward in supply chain management. It offers enhanced flexibility, efficiency, and responsiveness, proving to be a strategic advantage in our volatile market. By aligning more closely with actual market demands and reducing reliance on forecasts, DDMRP equips planners with the tools to navigate the complexities of modern supply chains.
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Call to Action
For those intrigued by the potential of DDMRP, further exploration into this methodology could unlock new efficiencies in your supply chain operations. To delve deeper into DDMRP and its applications visit www.b2wise.com or www.demanddriveninstitute.com
@Deman?
This sounds like a fascinating approach to supply chain management! Good move on reposting the article, Richard Forrest
Automotive Professional dedicated to helping industries reach their full potential. My cross-functional experience across multiple industries renders me industry-agnostic.
10 个月Great article Kevin Boake and worth pondering. Frequent order fluctuations will not impact the COGS for tier 1 suppliers on account of increased setup costs, expedited shipping (sometimes premium freight mode is required), higher inventor carrying cost for the supplier and most importantly smaler, more frequent orders might not benefit from economies of scale in production, potentially leading to higher per-unit costs.
Oracle Certified in Fusion- MFG, Inventory, Maintenance, Quality, Inventory & Cost Management.
10 个月Embracing DDMRP definitely augments reduction in E&O (Excess and Obsolescence), eliminates forecast (guess work), maintaining high SLA, gain high inventory turns, constant response/act/react to demand/inventory, based on throughput !! DC's pull/push will be another game changer too !! On pragmatic grounds, how many large companies with global supply chain footprint have switched from traditional MRPII, MPS, S&OP (although DDMRP promotes S&OP, I believe), to DDMRP?
MBA SCM | Supply | Demand | S&OP | Purchasing | Logistics | Transportation | Inventory | MRP | Master Scheduling
10 个月Im planning to initiate heavly study over DDMRP, seems to be game changing in my area.
Digital supply chain | Demand planning | IBP | S&OP | DDMRP
10 个月Great article Kevin!?? The shift away from the rigid MPS in DDMRP is an interesting step, as today most organizations struggle to keep high adherence to MPS even within the frozen period.? In another hand, I wonder if the buffer projections could also support capacity planning, this could help planners anticipate and proactively address potential capacity issues arising from real-time demand changes. What do you think??