What are the Benefits of DDMRP (Demand Driven Material Requirements Planning) that are Now Available in Microsoft Dynamics 365 Supply Chain Management?
Material Requirements Planning (MRP) has a long history of success in tracking manufacturing materials and components. Recently the global supply chains have been problematic across the globe affecting multiple industries. What can manufacturers and distributors do to prevent stockouts and overstocks? If you’re suffering from supply chain disruptions, it may be time to look at the benefits of adopting Demand Driven Material Requirements Planning (DDMRP) within your manufacturing ERP. Learn how DDMRP within Microsoft Dynamics 365 Supply Chain Management can benefit your company.
What is DDMRP?
The reality is that supply chain disruption and shortages are here to stay for reasons that may never have a solution. DDMRP is the next generation of planning and delivering goods on time despite possible shortages of supply that disrupt the manufacturing process and delivery time. Common reasons for supply chain disruption are:
- Longer lead times from overseas sourcing
- Market fluctuation (sometimes inaccurately forecast)
- Customers are demanding products with less lead time
Microsoft describes the 5 components of DDMRP with "five sequential components (steps). The first three components essentially define the initial and evolving configuration of a demand-driven material requirements planning model. The last two components define the day-to-day operation of the methodology.
- Strategic inventory positioning – Identify decoupling points in the supply chain network. Decoupling points are specific points of your supply chain where you put an inventory buffer that you will monitor and replenish.
- Buffer profiles and levels – For each decoupling point, identify the buffer sizes (minimum quantity, maximum quantity, and reorder point) and the reorder quantity.
- Dynamic buffer adjustments – Adjust buffer levels, based on varying operating parameters or planned future events.
- Demand-driven planning – Generate supply orders as they are required. These supply orders include manufacturing orders, purchase orders, and stock transfer orders
- Highly collaborative and visible execution – Run the supply orders with the help of visualization.
DDMRP is typically used by manufacturers that have a multi-level bill of materials (BOM). However, it can also be applied to distribution and retail networks."
Why Consider Adopting DDMRP
Here are just a few of the benefits of DDMRP:
- Improve customer service to consistently reach on-time order fulfillment rates
- Compress lead times across several industry segments
- Optimize inventory to enable inventory reductions without impacting service levels
- Improve planner accuracy by providing visibility of priorities instead of constantly fighting the conflicting messages of MRP
- Manage a predictive and resilient supply chain
DDMRP It is not a new module in Dynamics 365 and it does not replace existing on-board planning functionality. It's already integrated within the existing planning configurations in Dynamics 365 Supply Chain Management. You can use DDMRP in concert with existing setups to create the most useful planning configuration for your business.
- The Planning Optimization Add-in - It's now available from Microsoft and moves master planning calculations outside of Dynamics 365 Supply Chain Management, therefore, reducing planning runtimes from hours to minutes. The Planning Optimization Add-in introduced the function of priority-based planning to allow businesses to differentiate demand based on urgency.
- Microservices - Like the Planning Optimization Add-in, Microservices is just one way to increase value from an ERP migration to the cloud quickly. You will see the benefits like better performance by offloading workloads to the cloud and improving resiliency by allowing you to react to changing demand in real-time. Ultimately, these investments will help you mitigate stockouts and lower the cost of your on-hand inventory. Microsoft DDMRP provides all that while ensuring that more customer orders are fulfilled on time and accurately.
- DDMRP is included with Microsoft Dynamics 365 Supply Chain Management - Since it's included, it requires no additional license fees. DDMRP functionality has also been added to the existing Master planning module of Supply Chain Management but requires you to also use the Planning Optimization Add-in.
This ebook includes a self-assessment for any manufacturing company striving to reduce costs, improve quality and enhance productivity.
Rely on a Microsoft Dynamics 365 Expert
Clients First consultants have direct experience in the industries we support. The Clients First Texas office specializes in manufacturing, job shops, maintenance, repair, and overhaul (MRO) for aviation or heavy equipment organizations. We have customers in other industries, too, including make-to-order/engineering job shops, project manufacturing, field services, and wholesale distribution.
Nothing replaces a live presentation so please contact us to schedule a demonstration for your business. We support ProMRO with leading Cloud ERP solutions Acumatica and Microsoft Dynamics 365 Finance and Supply. We also support Dynamics 365 Business Central and have a deep knowledge of legacy ERP solutions like Dynamics AX (formerly Axapta) and Dynamics NAV (formerly Navision).
We’re a Microsoft Gold ERP Partner, a Certified Cloud Service Provider (CSP), and an Acumatica Gold Partner.
Please email our office in Dallas/Fort Worth, Texas, or call 800.331.8382. We're based in Dallas, Texas while servicing companies worldwide.
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