In recent months there has been some movement on the subject of “demand-driven mrp” (demand-driven material requirements planning). SAP has announced that its implementation of DDMRP in S/4HANA has been certified by the Demand Driven Institute. However, not only SAP but also other providers, such as DynaSys, integrate this new planning philosophy into their planning solutions or SAP add-ons. This blog article is intended to present the new procedure in more detail and give an overview of the latest news on the subject.
Origin of the DDMRP
DDMRP was introduced in 2011 in a new edition of the book “Orlicky’s Materials Requirements Planning” by the authors Carol Ptak and Chad Smith and is now distributed by the Demand Driven Institute. The concept of the DDMRP claims to eliminate the “nervousness” of traditional MRP systems and the so-called “bullwhip effect” by using five components. As a result, considerable savings potential is promised through lower inventories and reduced default costs. The five elements of the DDMRP are:
- strategic inventory positioning,
- buffer profiles and levels,
- dynamic adaptation,
- requirements-based planning and
- visible and common execution.