DDMRP: Beyond the Acronym

In a world with a perpetual flow of new crazes and trends, passing fads and game-changing ingenuities often wearing the same clothing, it is only the test of time that truly anoints an idea one way or the other. But as a trusted technology provider, our customers rely on us to make the right call upfront before the “test of time” deprives them of a competitive advantage.

Rewind to March 2016: A few ideological bloggers began to promote the panacea of Demand Driven Material Requirements Planning (DDMRP). The QAD DSCP product management team had to make the call: fad or game-changer?

In October 2017, QAD DSCP became the first global end-to-end supply chain planning solution provider to become certified by the Demand Driven Institute (DDI) as DDMRP compliant.

So What Is It?

DDMRP is a planning method used both for supply planning and execution control, defining stock positions and stocking levels in a dynamic way. It generates supply events according to the sales order of the day plus qualified sales spikes. DDMRP guides and alerts planning and execution in a visual way. To understand DDMRP requires one to think differently about supply chain flows and the decoupling of specific points in the supply chain. This is easier said than done, but if this hurdle is overcome, then DDMRP becomes surprisingly uncomplicated to understand and simple to use. The challenge however lies within the “if.”

DDMRP is not a buzzword, it is not a marketing spin on an existing concept. The buzz comes from the unique approach to modeling supply chains and the process of triggering a supply event from a demand signal. With DDMRP a supply chain is not a chain, but rather a network of networks. The networks within a network are decoupled, meaning there is no immediate and direct action and reaction between them. The flow of goods is buffered in strategically located positions with dynamically updated targets. The proverbial bullwhip impact is thereby controlled.

What Does DDMRP Mean for You?

DDMRP offers a unique advantage to QAD customers. The incremental value of any concept or technology is only in its comparison to a baseline or existing accepted norm. DDMRP screams volumes on the value spectrum when compared to traditional MRP and iterative DRP, especially for those customers struggling with a complex and inaccurate demand planning process.

DDMRP offers a tangible reduction in obsolete and excess inventory in addition to a proven track record of customer service improvements. Of course, reduced inventory and higher service levels are value claims not unique to DDMRP. For many QAD customers, these benefits are augmented with the unique value proposition of simplicity. Once one has embraced the demand driven basics and the strategic configuration components are in place, DDMRP is remarkably easy to plan with. The execution component is simple and intuitive. DDMRP borrows from the Theory of Constraints (TOC) approach of buffer level alerts using the colors of a traffic light. In caution of oversimplification, red is bad, yellow requires some replenishment action and green is ‘hold.’ Onboarding a new supply planner has never been easier.

What Happens Next?

There is no doubt that DDI’s DDMRP certification is the global benchmark in demand driven planning and execution technology. QAD expects that several of its peers in this technology space will have an awakening moment and will start playing DDMRP catch-up.

QAD is committed to the ongoing investment into the DDMRP journey of continuous improvement. This will not only involve additional R&D investment, but also renewed talent development such as the Certified Demand Driven Planner (CDDP) accreditation of the global services teams.

However, it is equally essential to recognize that DDMRP is not about the plug and play of certified technology. The adoption of a Demand Driven Operating Model requires a holistic approach. It is not something that can be done in part without considering technology, talent and process. QAD DSCP provides a solid supporting mechanism however the success is in the preparation. This includes having accredited talent on the planning team (not only the implementation team) and using experts to perform the supply chain modeling and determine the optimal placements of strategic inventory buffers. To mitigate against the risks of change and to quantify the business value, customers often choose to perform extensive pilots of DDMRP before an enterprise roll-out.

What are your experiences with DDMRP? Does the idea of simple and intuitive material requirements planning without the burden of product level forecasting sound enticing? I look forward to hearing your thoughts. Reply in the comments below and I’d be happy to answer any questions you may have!