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DDMRP II™ vs DRP/MRP

Supply Planning Improved. Bringing Demand-Driven Supply Chains to Life

O8 DDMRPII™ (End-to-end supply planning and execution) delivers objectives more effectively than DRP or MRP

Key inventory management objectives:

  • To deliver 99% fill rate and service level with minimal stocks at minimal cost
  • Reduce number of stock outs
  • Minimise excess stocks & obsolescence
  • Minimise administration, handling & transport costs
  • Reduce number of exception messages that drive non-value added activity
  • Allow business to focus on high value add processes and decision making
  • Minimise the reliance on inaccurate forecasts
  • Allow the supply chain to cope with uncertainty

 

Key Issue

DRP Process

O8 DDMRPII™ Process

Selection of appropriate replenishment control technique

  • 2 basic techniques set manually (Call-off or Make to order (MTO), & MRP.)
  • Reliance on forecast results in a focus on selecting the correct forecast algorithm – the algorithms can be highly complex & are often augmented by a specialist forecasting system.

7 separate control techniques: 

  • (MTO, RoP, Poisson distribution planning, Re-order cycle, Multiple level Re-order Point (kanban), rate based, promotions & event management).
  • Use of VVA (Volume & variability analysis ) to determine appropriate control technique by SKU.
  • Inventory control techniques re-assessed formally every month.

Correct safety stock in system

  • Inventory safety stock is manually set using specific volumes or number of days cover. Parameters often not maintained.
  • Safety stock built into calculation via customer service parameter. Stock is appropriate to each SKU and is recalculated monthly.

Calculation of inventory targets accounting for demand variability & forecast volume

  • Forecast algorithms attempt to predict time based fluctuations from history and build result into the plan.
  • Stock levels set for overall expected volumes and additional inventory added to cater for demand variability.
  • Selective use of volume forecasts based on historic accuracy.

Account for batch & delivery constraints when planning inventory targets

  • Inventory requirement accurate on day MRP is executed.
  • Exception messages created to encourage rules to be broken to restore plan
  • No formal ability to cater for delivery schedules or planning schedules in inventory target setting.
  • Targets are amended during calculation to account for lead-time & batch constraints.
  • Additional tools support multiple planning and execution business cycles. eg Fixed planning & ordering schedules.
  • Ability to link planning process and SKU level inventory targets to ABC analysis.

Support for financial and business planning

  • Inventory plan changes each time MRP is run.
  • Main driver of plan is the forecast – operational constraints hidden.
  • Individual planners alter plan with ‘gut-feel’ or off-system calculations that take into account recent business drivers, eg reduce stock levels. No ability to link these day to day decisions with an overall plan.

  • Separation of planning from daily ordering process results in inventory targets which are approved by business at S&OP meeting.
  • Inventory is attributed to operational constraints and the effect of altering those constraints can be seen in real time simulation tools.
  • Key decision parameters are service and inventory positions – supports clear link between policy setting & business mgt.

Rigorous & robust process

  • Substantial part of planners’ role undertaken ‘off-system’ on spreadsheets.
  • No in-built mechanism for reviewing appropriateness of safety stock numbers or current plan.

Monthly S&OP review cycle ensures robustness of targets & execution:

  • Metrics & KPI’s produced
  • Continuous improvement activity is focused on inventory drivers & improving business performance
  • Every SKU is reviewed & correct control technique & inventory target is re-assigned
  • Improvement activities are measured & incorporated as they happen

Minimisation of time delay and cost in running the planning process

  • MRP usually run on a fixed schedule. Output is a revised plan driving re-work and alterations to the plan on a regular basis.
  • Management of plan outputs is a manual and time consuming process.

  • Inventory plan fixed through operating period.
  • Replenishment signals produced automatically.
  • Plan & execution success constantly monitored & alerts produced ahead of issues occurring.

Request a copy of the PDF and learn how to improve
supply planning with DDMRPII  

Guaranteed ROI.

Up and running in 90 days.

100% remote implementation.

Pay no subscription fees until ROI is achieved.

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100% remote implementation

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Reduce inventory levels by 30-70%

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Unburden significant capital locked in inventory

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Compress lead times up to 85%

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Decrease obsolete inventory by up to 90%

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90 day rollout

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Diminish plan changes to less than 5%

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Shrink planner workload by 70%

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Provide customer service levels above 90%

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Avoid CAPEX and enable higher overhead absorption

O8 is the only enterprise capable
DDMRPII software solution available.

The only provider to have a team of professionals with 10 years+ real-world experience implementing and problem-solving in a DDMRP environment

The only one to deliver 10x increase in planner/SKU ratio as well as the expected inventory and service improvements

The only one that can cope with any supply chain challenge you may have

Modular server setup design to enable quick rollout to other locations if required

Ability to commit to any service level agreement without 3rd party involvement

Total control over support, DR and maintenance

Discover the difference: DDMRPII™ vs DRP/MRP.

View the slide deck and discover the difference and the effect on your supply chain planning.

 

Clients We’ve Helped