Get a copy of the deck today. Download the deck. https://o8supplychain.com/ddmrp-vs-mrp/ Learn the difference between O8's DDMRPII™ and DRP/ MRP. Learn how improved supply planning can help you achieve key inventory management objectives: *To deliver 99% fill rate and service level with minimal stocks at minimal cost *Reduce the number of stock-outs *Minimise excess stocks & obsolescence *Minimise administration, handling & transport costs *Reduce number of exception messages that drive non-value added activity *Allow business to focus on high value add processes and decision making *Minimise the reliance on inaccurate forecasts *Allow the supply chain to cope with uncertainty

1. DDMRPII(TM)
vs DRP/MRP
Bringing Demand-Driven Supply Chains to Life

2. 2
DDMRPII(TM)
- Supply planning improved.
● 100% remote implementation
● Reduce inventory levels by 30-70%
● Unburden significant capital locked in inventory
● Compress lead times up to 85%
● Decrease obsolete inventory by up to 90%
● 90 day rollout
● Diminish plan changes to less than 5%
● Shrink planner workload by 70%
● Provide customer service levels above 90%
● Avoid CAPEX and enable higher overhead absorption
ROI GUARANTEED - LEARN MORE
● Guaranteed ROI.
● Up and running in 90 days.
● 100% remote implementation.
● Pay no subscription fees until ROI is achieved.

3. O8 is the only enterprise capable DDMRPII™
software solution available.
● The only provider to have a team of professionals with 100 years+ real-world experience implementing and
problem-solving in a DDMRPII(TM)
environment
● The only one to deliver 10x increase in planner/SKU ratio as well as the expected inventory and service
improvements
● The only one that can cope with any supply chain challenge you may have
● Modular server setup design to enable quick rollout to other locations if required
● Uses a server based web portal to eliminate the security/support issues associated with local web browsers,
e.g. IE, Mozilla, Chrome and Safari
● Ability to commit to any service level agreement without 3rd party involvement
● Total control over support, DR and maintenance
SEE THE DIFFERENCE

4. DRP DRP
○ Daily Planning
○ Total Reliance on Forecast Accuracy – What &
When outside Firm Customer orders but
inside LT
○ Forecast Usage + Demand Variability
determines Safety Stock
○ Ad Hoc recalculation of Safety Stock
○ DRP operates Make to Order and aims to
keep On-Hand Inventory above safety stock
○ Forecast Accuracy directly determines actual
Service Level and planner Workload
Typical Results
○ Average On Hand Inventory above Safety
Stock
○ Service Level 97% +
○ High levels of planning activity / headcount
○ Unstable production environment
Safety Stock = Forecast Usage in LT
+ Demand/Supply Variability
Firm Customer OrdersAvg On Hand
Level Actual On Hand
Level
Month 1 Month 2 Month 3
Inventory
Forecast Orders

5. Re-Order Cycle / Re-Order Point
Customer OrdersAvg On Hand Level Actual On Hand Level
Month 1 Month 2 Month 3
ROP / ROC
○ Monthly Planning
○ Less Reliance on Forecast Accuracy
○ Statistically calculated Target Inventory
Level incorporating Service Level
○ Replenishment aims to keep inventory
above 0
○ Unexpected demand within historical
limits does not cause a production
issue
Typical Results
○ Average On Hand Inventory below
DRP Safety Stock (approx 20– 40%
below DRP)
○ Service Level 97% +
○ 40% less planning activity & 90% fewer
exception messages
○ Stable production environment
LT Inventory= Leadtime x Forecast usage per day
Variability Inventory = Coverage of 99% Historical Variability
Inventory

6. DRP vs Demand Pull scenarios
DRP projects forward to lead time &
nets off on hand and on order volumes
Safety stock breached at lead time Order raised for MOQ No exception message
Compare on hand plus on order to
ROP trigger level
RoP not reached No action No message
Assumptions, for all scenarios
● DRP forecast is saved monthly and is not changed
● ROP target is calculated monthly and is not changed
● DRP forecast is assumed to be even through the month
● Lead time is one month
Scenario 1: Week one, day one – no customer order
DRP projects forward to lead time &
nets off on hand and on order volumes
Safety stock breached at lead time Order raised for MOQ No exception message
Compare on hand plus on order to
ROP trigger level
RoP not reached No action No message
Scenario 2: Week one, day one – small customer order
Result difference: DRP orders stock early to forecast, average stock levels are higher
Result difference: DRP orders stock early to forecast, average stock levels are higher

7. DRP vs Demand Pull scenarios
DRP projects forward to lead time &
nets off on hand and on order volumes
Safety stock breached inside lead time
despite order raised on day one
No order Exception message generated to pull
forwards open order to meet revised
projected safety stock breach date
Compare on hand plus on order to
ROP trigger level
RoP Reached – Yes or No? If No, No order
If Yes, MOQ ordered
No message
Scenario 3: Week one, day three – customer order greater than one weeks usage
DRP projects forward to lead time &
nets off on hand and on order volumes
Safety stock breached inside lead time
& not recovered fully by orders
Urgent Order raised to meet projected
breach date for MOQ
Exception message generated to pull
forwards open order to meet revised
projected safety stock breach date
Compare on hand plus on order to
ROP trigger level
RoP reached Order raised No message
Scenario 4: Week one, day five – large customer order, 6 weeks of usage
Result difference: DRP generates exception message, additional workload, change signal generated to
supplier to deliver early, average stock levels are higher
Result difference
– 2 exceptions are generated adding to cost: an inside lead time order for the supplier & an expedite message
to the supplier which need to be handled
– DRP orders stock early to forecast, average stock levels are higher

8. DRP vs Demand Pull scenarios
DRP projects forward to lead time &
nets off on hand and on order volumes
Excess orders not identified as orders
have not consumed forecast
No order Exception message generated to push
back the latest order to revised safety
stock breach date
Compare on hand plus on order to
ROP trigger level
RoP Reached – No No order No message
Scenario 5: Week 2 & 3 no demand despite high demand in week one as in previous scenarios
DRP projects forward locally and at the
centre to lead time & nets off on hand
and on order volumes
Safety stock breached inside lead time
& not recovered fully by orders,
possibly at both locations
Urgent Order raised to meet projected
breach date for MOQ or order qty at
both locations
Multiple exception messages
generated to pull forwards any open
orders to meet revised projected safety
stock breach date locally and centrally
Compare on hand plus on order to
ROP trigger level in market
RoP reached Order raised, possibly multiple MOQs
ordered. Shipment of orders may
trigger re-order signal also at centre
No message
Scenario 6: Large customer order in local market that exceeds forecast
Result difference: DRP generates exception message, additional workload, change signal generated to
supplier to deliver later
Result difference
– In both scenarios the centre sees the order
– DRP will create multiple exception messages and workload as well as amplifying the issue through
continuing to project forwards centre demand based on actual plus forecast for the rest of the month plus the
forecast for all other markets
– Excessive change signals built into the process and significantly higher average stock levels

9. Key inventory management objectives
● To deliver the required level of customer service with minimal stocks at minimal cost
○ Reduce number of stock outs
○ Minimise excess stocks & obsolescence
○ Minimise administration, handling & transport costs
● Reduce number of exception messages that drive non-value added activity
● Allow business to focus on high value add processes and decision making
● Minimise the reliance on inaccurate forecasts
● Allow the supply chain to cope with uncertainty
9

10. O8 DDMRPII(TM)
(demand driven inventory management processes) deliver
objectives more effectively than DRP or MRP
Selection of appropriate
replenishment control
technique
2 basic techniques set manually (Call-off or Make to order
(MTO), & MRP.)
Reliance on forecast results in a focus on selecting the
correct forecast algorithm - the algorithms can be highly
complex & are often augmented by a specialist forecasting
system.
7 separate control techniques:
(MTO, RoP, Poisson distribution planning, Re-order cycle, Multiple level
Re-order Point (kanban), rate based, promotions & event management).
Use of VVA (Volume & variability analysis ) to determine appropriate control
technique by SKU.
Inventory control techniques re-assessed formally every month.
Correct safety stock in
system
Inventory safety stock is manually set using specific volumes
or number of days cover. Parameters often not maintained.
Safety stock built into calculation via customer service parameter. Stock is
appropriate to each SKU and is recalculated monthly.
Calculation of inventory
targets accounting for
demand variability &
forecast volume
Forecast algorithms attempt to predict time based
fluctuations from history and build result into the plan.
Stock levels set for overall expected volumes and additional inventory added
to cater for demand variability.
Selective use of volume forecasts based on historic accuracy.
Account for batch &
delivery constraints when
planning inventory
targets
Inventory requirement accurate on day MRP is executed.
Exception messages created to encourage rules to be
broken to restore plan
No formal ability to cater for delivery schedules or planning
schedules in inventory target setting.
Targets are amended during calculation to account for lead-time & batch
constraints.
Additional tools support multiple planning and execution business cycles. eg
Fixed planning & ordering schedules.
Ability to link planning process and SKU level inventory targets to ABC
analysis.
Key Issue DRP Process O8 DDMRPII(TM)
Process

11. Support for financial and business
planning
Inventory plan changes each time MRP is run.
Main driver of plan is the forecast - operational constraints
hidden.
Individual planners alter plan with 'gut-feel' or off-system
calculations that take into account recent business drivers, eg
reduce stock levels. No ability to link these day to day
decisions with an overall plan.
Separation of planning from daily ordering process results in
inventory targets which are approved by business at S&OP
meeting.
Inventory is attributed to operational constraints and the effect
of altering those constraints can be seen in real time simulation
tools.
Key decision parameters are service and inventory positions –
supports clear link between policy setting & business mgt.
Rigorous & robust process Substantial part of planners’ role undertaken 'off-system' on
spreadsheets.
No in-built mechanism for reviewing appropriateness of safety
stock numbers or current plan.
Monthly S&OP review cycle ensures robustness of targets &
execution
● Metrics & KPI’s produced
● Continuous improvement activity is focused on inventory
drivers & improving business performance
● Every SKU is reviewed & correct control technique &
inventory target is re-assigned
● Improvement activities are measured & incorporated as they
happen
Minimisation of time delay and cost
in running the planning process
MRP usually run on a fixed schedule. Output is a revised plan
driving re-work and alterations to the plan on a regular basis.
Management of plan outputs is a manual and time consuming
process.
Inventory plan fixed through operating period.
Replenishment signals produced automatically.
Plan & execution success constantly monitored & alerts
produced ahead of issues occurring.
Comparison continued
Key Issue DRP Process O8 DDMRPII Process

12. 12
DDMRPII(TM)
Supply planning improved.
Transformational results are typical. Guaranteed ROI.
Up and running in 90 days. 100% remote implementation.
Pay no subscription fees until ROI is achieved.
● 100% remote implementation
● Reduce inventory levels by 30-70%
● Unburden significant capital locked in inventory
● Compress lead times up to 85%
● Decrease obsolete inventory by up to 90%
● 90 day rollout
● Diminish plan changes to less than 5%
● Shrink planner workload by 70%
● Provide customer service levels above 90%
● Avoid CAPEX and enable higher overhead absorption
ROI GUARANTEED - LEARN MORE