Demand Driven MRP is a methodology for planning production and material procurement.
How does the Demand Driven MRP work?
We live in a world of volatility, uncertainty, and complexity, making it increasingly difficult to make predictions based on past performance by employing traditional planning methods.
DDMRP promotes and protects the flow of information and materials.
This is done through some characteristic elements of the methodology:
- Strategic positioning of decoupling stocks.
- Recalculating stock levels and solving the replenishment equation with a very high frequency
- Visual and concrete approach to planning
The DDMRP method, in essence, makes it possible to:
- Reduce Inventories and thus improve turnover ratios
- Increasing the Level of Service (On Time Delivery to the Customer)
- Increase Responsiveness, resulting in shorter time between customer request and order fulfillment and thus customer satisfaction
- Reduce the cost of managing materials planning
SAP has embraced this methodology by implementing it fully in the S/4HANA releases, from 1709 onward. A series of dedicated apps have been developed for all phases of which the Demand Driven MRP is composed.
