{"id":10555,"date":"2021-03-02T05:53:01","date_gmt":"2021-03-02T03:53:01","guid":{"rendered":"http:\/\/s38547.p1394.sites.pressdns.com\/uncategorized\/take-control-of-your-inventory-in-2021\/"},"modified":"2021-03-02T05:53:01","modified_gmt":"2021-03-02T03:53:01","slug":"take-control-of-your-inventory-in-2021","status":"publish","type":"post","link":"https:\/\/us.syspro.com\/blog\/erp-for-inventory\/take-control-of-your-inventory-in-2021\/","title":{"rendered":"Take Control of Your Inventory in 2021"},"content":{"rendered":"

As the ripples from 2020\u2019s global events are still being felt throughout the manufacturing industry, now more than ever it is essential for manufacturers to manage their supply chain, forecast demand, and use production resources as efficiently as possible. It is during challenging periods such as these that manufacturing businesses need to review the tools they use to plan and manage inventory and production. A tool which has received some attention is DDMRP (Demand-Driven Material Requirements Planning).<\/p>\n

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Paradigms in manufacturing forecasting<\/strong><\/p>\n

A paradigm is a system of theories, procedures and standards that a body of people consider legitimate for their situation. The manufacturing industry has been through its own paradigms and shifts in its approach to planning and forecasting. The longest-standing one is MRP (Materials Requirements Planning). The latest one is DDMRP.<\/p>\n

MRP has existed for many decades but advances in computing have led it to be deployed and used more broadly. MRP is concerned with production scheduling<\/a> and inventory control<\/a> to meet customer requirements, and attempts to keep adequate inventory levels to assure that required materials are available when needed. The major inputs are the master production schedule, on-hand inventory information, and bill of material. The outputs are production orders and purchase orders. A more recent variant is MRPII which is widely used and adds inputs of machine capacity scheduling, demand forecasting, quality assurance and general accounting.<\/p>\n

With further computing advances in the 1990s came another paradigm – APS (Advanced Planning and Scheduling) – defined as “a computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others” (APICS 2011). APS had a brief period of popularity but fell into the trough of disappointment as its complexity and need for large volumes of data could not be handled by the average manufacturer.<\/p>\n

What is DDMRP?<\/strong><\/p>\n

DDMRP was first proposed in 2011 to solve the shortcomings of MRP. The problem at the time with MRP was that there were few ‘good’ MRP implementations, and not anywhere near as many as professions hoped.<\/p>\n

DDMRP was designed to define:<\/p>\n

    \n
  1. where to stock;<\/li>\n
  2. how much to stock;<\/li>\n
  3. the generation of supply orders based on average daily usage and known sales spikes;<\/li>\n
  4. how to conduct a review;<\/li>\n
  5. a visual dashboard to guide and alert execution.<\/li>\n<\/ol>\n

    Since starting, DDMRP implementations have claimed higher service levels, significant inventory reductions, shorter lead times and cost reductions. All issues that manufacturers are looking to achieve. It also aims to reduce variability so that production can operate smoothly and without major hiccups. Variability is reduced by the intelligent use of inventory buffers at key junctions in the supply chain.<\/p>\n

    Pros of DDMRP<\/strong><\/p>\n

    There are five components of DDMRP that can address supply chain process challenges and enhance a supply chain strategy.<\/p>\n

      \n
    1. Helps ensure inventory is in the right place at the right time by providing visibility of where stock should be held in the supply chain for optimum performance.<\/li>\n
    2. Allows visibility of buffer profiles and stock levels by assessing the stock on hand, the amount needed and their variability.<\/li>\n
    3. Provides the ability to adjust stock levels dynamically by looking at trends in sales as well as seasonality.<\/li>\n
    4. Uses demand-driven planning to create resupply signals so that the correct stock supply is prioritized based on the actual need.<\/li>\n
    5. Delivers benefits by removing supply chain bottlenecks.<\/li>\n<\/ol>\n

      There are other benefits of DDMRP.<\/p>\n