21. DDMRP Series - Introduction

Guest Name : Ken Titmuss - CEO, Principal Consultant and Educator, Kent Outsourcing Services. Language : English, Publication date:  Oct, 28th 2019 Ken is the CEO, Principal Consultant and Educator from Kent Outsourcing Services. His expertise mainly in Operations and Supply chain management where he spent many years in this area.  He is also a member of VCARE’s Education and Research Executive Board (EREB), Canada. This is the 1st episode from DDMRP Series where Ken explained the benefits for having a demand driven approach.  Connect with guest at: Linkedin - Ken Titmuss, contact him at: [email protected] Key highlighted: In 2011, Carol Ptak and Chad Smith, edited and updated the third edition of ‘Orlickly’s MRP’ book which has been the prime planning text since 1975. In this edition they first documented the new Demand Driven MRP principles that uses accurate actual orders, or demand, to trigger replenishment of raw material, finished goods and distribution inventory buffers. Early adopters of this methodology have gained tremendous advantages in reduced inventories, greater service levels and shorter lead times by using this methodology. There are 5 components of DDMRP namely, One: Strategic Inventory Positioning. Two: Buffer Profiles and Buffer Sizing. Three: Dynamic Adjustment of the Buffers. Four: Demand Driven Planning and then Five: Demand Driven Execution. It is interesting to note that this DDMRP methodology, compared to the traditional way of planning our businesses, includes both planning and execution whereas with traditional planning there is no integrated execution ability. We will concentrate the next 5 podcasts on these five components of DDMRP. But initial in this podcast let us examine why it is important to consider this new technique for planning. Well, the first law of supply chain management is that ‘All benefits in the supply chain will be directly related to the speed of flow of relevant information and relevant materials. In essence, DDMRP is about strategically positioning inventory buffers in the correct locations in the supply chain, protecting these buffered positions with the right levels of inventory. Dynamically adjusting these buffers as changes in demand are detected. Pulling the demand from these positions, and then adapting the positions to the continuously changing supply chain environment, all in real time.