How To Strike A Strategic Inventory Balance In Your Supply Chain With DDMRP?
Recently, Microsoft announced the preview of the demand driven material requirements planning (DDMRP) feature for Microsoft Dynamics 365 Supply Chain Management.
DDMRP is considered to be the next best thing in the world of material requirements planning (MRP), which has relished an amazing history as far as the world of manufacturing is concerned. As MRP continued to be useful, it went on to become the standard function of modern-day enterprise resource planning (ERP) systems. In recent years, many manufacturing philosophies and methods started gaining popularity but many of them faded with time.
However, a few have transformed the segment of manufacturing in their own right. These include lean manufacturing, theory of constraints (TOC), distribution requirements planning (DRP), and Six Sigma. In the last few years, a relatively new methodology known as DDMRP, the newest iteration of MRP, has gained immense popularity.
Demand driven material requirements planning (DDMRP) refers to a multi-echelon planning and execution method to protect and promote the flow of relevant information through the establishment and management of strategically placed decoupling point stock buffers, according to the Demand Driven Institute. Dynamics 365 Supply Chain Management is Demand Driven Institute compliant.
One of the biggest advantages of Demand driven material requirements planning is that it helps in improving the quality and delivery of customer service to consistently reach 97 to 100 percent on-time order fulfillment rates. Moreover, it can help in optimizing inventory to unlock inventory reductions of 30 to 45 percent without impacting service levels. It can also help in compressing lead times for typical reductions above 80 percent across several industry segments.
If this is not all, Demand driven material requirements planning (DDMRP) can also be helpful to reduce total operating costs by eliminating the false signals and schedule break-ins that drive expensive expedited activities, such as partial ships, fast freight, and cross-ships. It can also be used to enhance planner productivity by offering visibility of priorities instead of constantly fighting the conflicting messages of MRP.
Find out how your organization can leverage Dynamics 365 Supply Chain Management to reduce infrastructure costs while increasing production volume by exploring groundbreaking innovations such as demand driven material requirements planning (DDMRP). Call or email us at C.I.G Consultants now.