View and apply detailed insights for DDMRP

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Users by admins, makers, or analysts	Aug 1, 2022	Oct 1, 2022

Business value

A growing number of companies want to control their supply chain based on Demand Driven Material Requirements Planning (DDMRP) principles. This typically yields inventory reductions of 30-45 percent while improving customer service. With this release, the Planning Optimization Add-in for Dynamics 365 Supply Chain Management fully supports the DDMRP principles. With native DDMRP support in Planning Optimization, customers can benefit from DDMRP supply chain optimization without the need for external solutions.

Feature details

This release adds the following two enhancements to the existing Demand Driven Material Requirements Planning (DDMRP) functionality provided by Planning Optimization:

• Decoupled lead time page: This new page lets you view the decoupled lead time for each item coverage record. It also provides a visual tree structure where you can review an item's bill of materials, inspect the lead time on each component, and see which items function as decoupling points. This allows you to visually identify the decoupling points in your product structures.
• Average daily usage forward/blended: This functionality provides data that lets you estimate how much of a given product will be needed in the future. It can be useful for forecasting when introducing a new product or adjusting the usage of a current product. The average daily usage is a key parameter in buffer value calculations (minimum, reorder point, maximum).

The DDMRP methodology

DDMRP is a formal, multi-echelon planning and execution method for protecting and promoting the flow of relevant information by establishing and managing strategically placed decoupling point stock buffers. DDMRP combines aspects of material requirements planning (MRP) and distribution requirements planning (DRP) with the pull and visibility emphases found in the Lean and Theory of Constraints methodologies and the variability reduction emphasis of Six Sigma. These elements are successfully blended through key points of innovation in the DDMRP method. DDMRP is the supply-order generation and management engine of a Demand Driven Operating Model (DDOM). DDMRP can best be summarized as "position, protect, and pull."

A growing number of companies want to control their supply chain based on DDMRP principles. This typically yields inventory reductions of 30-45 percent while improving customer service.

DDMRP provides the following sequential components:

• Strategic inventory positioning: Determines where the decoupling points are placed.
• Buffer profiles and levels: Determine the amount of protection at each decoupling point.
• Dynamic adjustments: Define how the level of protection flexes up or down based on operating parameters, market changes, or planned or known future events.
• Demand-driven planning: The process by which supply orders (purchase orders, manufacturing orders, and stock transfer orders) are generated.
• Visible and collaborative execution: The process by which a DDMRP system manages open supply orders.

The first three components essentially define the initial and evolving configuration of a DDMRP model. The final two elements define the day-to-day operation of the method. DDMRP is typically the start of an organization's transformation to a demand-driven adaptive enterprise.

DDMRP for Planning Optimization

With native DDMRP support in Planning Optimization, companies can benefit from DDMRP supply chain optimization without the need for external solutions.

The DDMRP offering for Planning Optimization includes the following main components:

• Inventory positioning: Enables companies to calculate and identify the decoupled lead time (DLT) for purchased, distributed, and manufactured items.
• Buffer profiles: Groups items into independently managed families with variable settings for zone impact. DDMRP buffers and zone values are calculated using a combination of buffer profile attributes and the individual part traits of usage, lead time, and order minimum.
• Dynamic buffer adjustments: Buffers for planned or anticipated events that are dynamically adjusted as needed. They are maintained as minimum, re-order point, and maximum.
• Demand-driven planning: Enables the system to do the following:
  • Perform the DDMRP net flow equation, including qualifying sales order demand (due today, past due, and qualified spikes).
  • Display net flow status (color, percentage, and quantity) for easy prioritization and supply order generation.
  • Provide a planner workbench where all elements of the net flow equation are visible.
• Highly visible and collaborative execution: Display alerts based on buffer status for on-hand position.

Planning Optimization benefits

With Planning Optimization, companies can benefit from:

• Significantly improved performance and scalability with in-memory processing.
• Minimized system impact on other processes made possible by running master planning as a separate service.
• Near real-time insights into requirement changes, achieved by running master planning several times daily during office hours.

Learn more about Planning Optimization

For more information about the Planning Optimization migration process and answers to frequently asked questions, see Migration to Planning Optimization for master planning.

See also

Demand Driven Material Requirements Planning (DDMRP) overview (docs)