Demand Driven MRP – Compliant Software

To be fully Compliant with Demand Driven MRP , software needs to support the 5 DDMRP components:

1. Strategic Inventory Positioning

2. Buffer Profiles & Buffer Level Determination

3. Dynamic Buffers

4. Demand Driven Planning

5. Highly visible and collaborative execution.

None of the popular ERP software packages have any significant degree of compliance (regardless of what the vendor will claim!). To be blunt, the vendors typically have very little understanding of the logic of the MRP software embedded in their systems, let alone the depth of understanding to appreciate exactly how much the core MRP logic – which still has a lot to offer – is actually a cause of so many planning and execution problems.

Several software packages (typically, that work alongside popular ERP software) provide a varying degrees of  support for SOME of the elements, mostly:

  • The ability to set some parameters for Stock Buffers
  • To generate demands for replenishment based on the rate of actual consumption
  • Some support for the execution of replenishment, including priority management based on buffer penetration

These software packages are typically in support of the Theory of Constraints (TOC) Distribution and Supply Chain solution, aimed at establishing stock buffers of finished products at the plant warehouse and in some cases at client warehouses, and suggesting replenishment orders as actual consumption uses up the stock. Replenishment orders may be to replenish the downstream stock from the plant warehouse; or, to replenish the plant warehouse from production. The Buffer Management may also be applied to Materials.

The major limitation on these is the total lack of support for Strategic Inventory Positioning, which of course is the pivotal step in DDMRP. Without a solid basis for the decision as to where to establish stock buffers in a complex suite of Bills of Material, there IS no DDMRP.

Other limitations include no provision for buffering component parts (versus finished goods); no provision for seasonal Buffer Profiles or distinct profiles to recognize consumption trends or different levels of variability in supply or demand; and limited execution support.

There is currently only one software package designed specifically for DDMRP; Replenishment+™, by Constraints Management Group (CMG).

This software was developed by CMG’s technical development team as CMG partners, consultants, and associates developed and refined the DDMRP concept over several years in response to client needs.

You can find more information on the technical solution here: Demand Driven Tech.