Highly Visible and Collaborative Execution in Demand Driven MRP

A DDMRP Recap:

There are 5 major elements to Demand Driven MRP (DDMRP):

  1. Strategic Inventory Positioning
  2. Buffer Profile and Buffer Level determination
  3. Dynamic Buffers
  4. Demand Driven Planning
  5. This page’s focus: Highly Visible and Collaborative Execution

MRP has been missing “Execution” support for 50 years

When we say our Planning systems are broken, they’re broken for Planning – which is what they were supposed to do well – AND for Execution, which they were not. Problem is, NOTHING ELSE has ever been provided for execution support either. (And certainly not the MES systems of the 80’s and 90’s).

There has been an illusion for decades (built-in to virtually every planning system) that due dates should be the basis for priority planning.When you don’t have clear visibility to actual and relative priorities, you’re left with due dates.

Demand Driven thinking leads to a great question: do you want your vendors to deliver on time, or do you want them to make sure you never stock-out?

This isn’t just a purchase order question, of course it extends to manufacturing orders too. And it’s especially meaningful when you realize that dates from MRP are often unrealistic, or inaccurate, and that the quantity suggested might be highly challenge-able. Plus, on-time delivery to request, on-time to required, and on-time delivery to promised also become entirely different in today’s volatility.

And it’s even more meaningful if you both make-to-order and make-to-stock where even the due date priority system falls apart. How many systems have your encountered where there’s a common priority system across both types of orders?

Let’s go back to a vendor’s situation; he sees he has an order to ship to you due 21st, another due 28th. But what if the part they’re to ship on the 28th is right about to stock-out, while you still have 2 or 3 weeks worth of the part due on the 21st?

There are two problems here. First, the vendor is entirely unaware of the true realities. And second, so – probably! is the planner! If the vendor called to ask “which do you want first,” how many planning systems give the Planner the data to confidently answer the question?

How many times have you paid expediting costs to bring something in that fails the dust test in a walk-around six months later?

In Demand Driven MRP, Execution support is a priority.

First, The zone form of color-coding (red, yellow, green) is highly visible, easy to understand and even intuitive.

Second, the percentage of Buffer Remaining gives a degree of precision when within the same color zone … Yellow and 40% penetration versus Yellow and 60% penetration, for example. Which of these is the higher priority?

This is information that should be widely available, of course – and especially to vendors.

Then, third, there are the alerts.

Buffer status alerts based on On-hand, and alerts based on projected Buffer status.

And, synchronization alerts; alerts warning of material synchronization threats, and alerts warning you to check on the status of critical non-stocked parts BEFORE they become an issue through late arrival.

So … highly visible, collaborative execution, based on real time, meaningful, absolute and relative priorities.


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