Demand Driven Material Requirements Planning (DDMRP), Version 2. Carol Ptak
On-Hand Alert
Projected On-Hand Alert
Synchronization Alerts
Material Synchronization Alerts
Lead Time Alert
Summary
CHAPTER 11
DDMRP Impacts on the Operational Environment
DDMRP Strategic Buffer Criteria
The Decoupling Test
The Bidirectional Benefit Test
The Order Independence Test
The Primary Planning Mechanism Test
The Relative Priority Test
The Dynamic Adjustment Test
DDMRP Versus Safety Stock and Order Point
Safety Stock and the Buffer Criteria
Order Point and the Buffer Criteria
DDMRP Impacts on Scheduling
DDMRP and Master Production Scheduling Assumptions
DDMRP Shop Floor Scheduling Implications
Finite Scheduling with DDMRP?
Additional Scheduling Sequence Impacts
DDMRP and WIP Priority Management
Summary
CHAPTER 12
DDMRP Metrics and Analytics
Measuring Relevant Information (Signal Integrity)
Measuring Decoupling Point Integrity
Outlying Event Reports
Measuring Velocity
Driving Improvement in DDMRP
Summary
CHAPTER 13
The Demand Driven Adaptive Enterprise Model
Demand Driven Operating Model
Element #1: Pacing to Actual Demand
Element #2: Strategic Decoupling Points
Element #3: Strategic Control Points
Element #4: Dynamic Buffering
Demand Driven Sales and Operations Planning
Tactical Configuration and Reconciliation
Tactical Review
Tactical Exploitation
Tactical Projection
Strategic Recommendation
Strategic Projection
Adaptive Sales and Operations Planning
The DDAE Development Path
Stage 1: Operational Efficiency (Cost)
Stage 2: Operational Efficiency (Flow)
Stage 3: DDAE Level I
Stage 4: DDAE Level II
Stage 5: DDAE Level III
Summary
Contribution by Dick Ling
CHAPTER 14
Implications for Technology
Operations and Information Technology—Two Ships Diverging in the Night?
DDMRP Software Compliance Criteria
PART 3 APPENDICES
APPENDIX A
An MRP Example
The Scenario
Simulating the Scenario
APPENDIX B
Simulating DDMRP Buffers
About the Simulation
Widget Simulation Results
Gazoonk Simulation Results
Simulating the Impact of Minimum Order Quantities
Summary
About the Author
APPENDIX C
Applying DDMRP to the Apparel Retail Environment
The Need for a Retail Application of DDMRP
A Retail Apparel DDMRP Example
Special Characteristics and Challenges of the Apparel Retail Environment
The Proposed Model
Retail DDMRP Buffer Zone Considerations
Realized Results
About the Author
APPENDIX D
Demand Driven MRP Dictionary
APPENDIX E
The Innovations of DDMRP
Endnotes
References
Index
When I was asked to help write the chapter on S&OP for this book, I was complimented and eager to make a contribution. With the development of DDMRP and now the writing of this book, Ptak and Smith have broken through common practice to bring common sense to supply chain management.
If your company is facing variability and uncertainty across your supply chain and the future looks little like the past, then this book holds the answer. DDMRP represents the future of planning in today’s complex and volatile supply chains. Inherent flaws in the traditional planning approaches are exposed and resolved for today’s complex adaptive supply chains. With the Demand Driven Adaptive Schema and the pivotal position of Demand Driven Sales and Operations Planning, this is not just a better way to plan; it is a better way to run an organization in today’s hypercompetitive environment. Operations and strategy can now easily and realistically be connected bi-directionally, allowing both to adapt to critical changes for the best return on shareholder equity.
This book is the ultimate reference for this new way of life across a dynamic adaptive supply chain.
Dick Ling
S&OP Consultant
Author of Orchestrating Success
This book will use two sources of definitions. All known and accepted terms that are not new with the advent of Demand Driven Material Requirements Planning (DDMRP) will be defined using definitions from the fourteenth edition of the APICS Dictionary. The authors thank APICS for its support of this project. Since 1957, APICS has been the premier professional association for supply chain and operations management and the leading provider of research,