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The DDMRP to accelerate the business
The DDMRP (Demand Driven Material Requirements Planning) is a system which optimizes the planning and the multi-level execution of the Supply Chain, and which works by considering only the actual orders without having to rely on a sales forecast.
This way the flow of products is protected by positioning and managing the strategic decoupling buffers, which provides a much simpler and more immediate guided process of priority and release of supply orders.
Thanks to the combined support of Gruppo Sme.UP and of our Production Planner Paolo Minnozzi, we implemented a DDMRP module directly into Nadella management system.
The immediate benefits are:
- An increase in the level of service, resulting in the reduction of the lead time for delivery
- A reduction of planning time
- A greater ease in proactive management of emergencies
- A considerable reduction of all-time consuming activities related to expediting
Find out how with this video:
Case history Gruppo Sme.UP Nadella: the DDMRP project
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Nadella case-history translation:
My name is Paolo Minnozzi and I have been working at Nadella since 2016 as a production planner. Together with Gruppo Sme.UP I have implemented a DDMRP system used in business processes.
The history of Nadella started in France in 1930. The company has developed over time and moved from being a supplier of needle bearings and linear guide components to an experienced system partner in providing comprehensive assistance within mechanical handling. The companies that are part of our group stand out in terms of: high quality and reliability of products, in-house processes and supply chain. Moreover, we can offer a great flexibility supported by the expertise of our engineers to better suit our customers’ customization needs.
Monitoring of stocks, along with the improvement of the level of service without a sales forecast are some of the major reasons why DDMRP system has been implemented. The current environment is affected by high uncertainty and volatility which does not allow efficient use of the MRP system alone.
Demand driven MRP is an innovative method for planning ed execution the Supply Chain, the basic principle of which is to determine and manage the decoupling buffers in order to cope with customers orders only, without a forecast. We have been supported by Gruppo Sme.UP and Sme.UP ERP software along the whole implementation process.
The DDMRP theory suggest what the steps to be taken should be and the best way to implement the method. There are 5 basic steps.
- The first step, called the strategic positioning of stocks, involves deciding where the decoupling buffer is to reside. This fist steps turns out to be more strategic as it involves having to determine which products will be dealt with using this approach.
- The second step is known as the determination of buffer levels. The parameters related to the size of the buffers were already available in Sme.UP, with no time expenditure and no use of resources required.
- The third step involves having to determine how to make the buffer levels vary according to the change in external conditions. One of the benefits of DDMRP is the fact that buffers are adaptive: for example, if the consumption of a product increases over time, the stock level for that product will also increase accordingly.
- The fourth step involves implementing the equation of the net flow, i.e. the heart of the DDMRP algorithm used to create production and purchase orders. With Sme.UP ERP it was a no brainer for us to set up the template since the necessary information was already available within the system.
- The last step is to set up the operational management of orders. Sme.UP consultants have provided us with a card used to perform the DDMRP effectively.
As suggested by the theory, for each product dealt with using the DDMRP, the status of the buffer is calculated and the tasks to be performed are highlighted in different colours: if the buffer status is green, no action is required; if the buffer status is yellow, either a production or a purchase order will be issued; if the status of the buffer is red, you will need to anticipate a production or purchase order previously issued.
The commitment of Sme.UP consultants, as well as the ductility of the ERP made the tool available in a short time and the first results came right away, owning to the fact that the tool is integrated with the data of the ERP, which constantly communicates with the MRP system.
Among the benefits obtained, it’s worth mentioning: an increase in the level of service, resulting in the reduction of the lead time for delivery, due to the fact that the average stock for products handled by the DDMRP is maintained within an optimal range (neither too much nor too little); the second advantage involves a reduction of planning time. The production planner can thus focus on critical emergencies first, by looking at products with a red buffer status and then engage in routine activities, focusing on products where the buffer status is yellow. Compared with MRP, emergencies are dealt with more proactively. As a result, all time-consuming activities related to expediting are considerably reduced.
Due to the excellent quality of the work carried out with the consultants of Gruppo Sme.UP and in view of the results obtained from the DDMRP, we intend to produce even better outcomes and keep on implementing this project.
This is the reason why we want to extend the above method, including other product lines. In terms of software development, we intend to make the result graphically evident, for a more noticeable effect, in particular as far as monitoring of stocks is concerned.
I advise all companies to assess the DDMRP implementation process. Training is the first step; the next step is a pilot project and eventually you can move on to the integration of DDMRP in business processes. I recommend that you don’t stop studying and deepening your knowledge of the DDMRP, as the first results are just the tip of the iceberg of what the DDMRP can provide.
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