Since the 1970s, companies have been using Material Requirement Planning to calculate the materials and ingredients for manufacturing. The supply chain has changed a lot from 1970-2023. DDMRP is a new planning methodology introduced in market by Demand Driven Institute. Please review the presentation below to know the current supply chain issues, understand DDMRP methodology, and how D365 F&O supports DDMRP.

1. DEMAND DRIVEN
REQUIREMENT MATERIAL
PLANNING
Presented by: Sravan Batchala

2. Agenda
1 Current trends in Supply Chain
2 Operations planning and control
3 DDMRP Overview
4 Advantages of DDMRP
5 Strategic Inventory Positioning
6 Buffer levels
7 Dynamic adjustments
8 Demand driven planning
9 Visual and Collaborative execution

3. Current trends in Supply chain

4. Customer tolerance
times
Long weeks or months to Short
Ecommerce, hours
Product life cycles
Long years or even decades to short
usually months to days
What changed in Supply chain
Supply chain complexity
Low most linear chains to High Supply
webs
Forecast accuracy
Forecast high variations due to lack of
tools and resources to new
methodologies like MRP and DDMRP
Long lead time parts
Few local vendors to global procurement.
International trading
Product complexity and
customization
Low variations or choices or
configurations to customer chose
configurations
Information technology
Less information on products to one
click information
Pressure for leaner
Inventories
Storage costs less to high. Increase in
service levels

5. Operations Planning & Control
Demand-Side
Activities
Forecasting
Demand
Management
Distribution
Requirements
Planning
Strategic Planning
Priority Planning
Sales and Operations
(S&OP): Production Plan
Master Scheduling (MS):
Master Production
Schedule (MPS)
Material Requirements
Planning (MRP)
Supply-Side
Activities
Resource
Planning
Rough Cut
Capacity
Planning
Capacity
Requirements
Planning

6. DDMRP Overview
”A method to model, plan and manage supply chains to protect and promote the flow of relevant information
and materials. DDMRP uses strategic decoupling points to drive supply order generation and management
throughout a supply chain.”
Strategic
Decoupling
Buffer Profile and
levels
Dynamic
Adjustments
Demand Driven
Planning
Visible and
Collaboration
Execution
1 2 3 4 5
Position Protect Pull

7. Strategic Inventory Positioning
Strategic inventory positioning involves identifying
decoupling points in your supply chain, where you
can build up inventory on hand. This approach is
mainly used to help compress lead times and
absorb shocks to your supply chain. It lets you
mitigate the "bullwhip effect," because demand
variability isn't passed all the way down the supply
chain

8. Decoupling points
• External variability
• Inventory leverage and flexibility
• Critical operation protection
• Customer tolerance time
• Sales order visibility horizon
• Market potential lead time

9. Decoupling points
Handle
Seat
Wheel
Tire Rim
Bicycle
(1)
Wheel
(2)
Seat
(1)
Handle
(1)
Nut
(25)
Bolt
(5)
Rim
(2)
Tire
(2)
Handlebar
(1)
Stem
(1)
LT
10
LT
02
LT
02
LT
8
LT
15
LT
1
LT
1
LT
3
LT
4
LT
6

10. Decoupling points
Handle
Seat
Wheel
Tire Rim
Bicycle
(1)
Wheel
(2)
Seat
(1)
Handle
(1)
Nut
(25)
Bolt
(5)
Rim
(2)
Tire
(2)
Handlebar
(1)
Stem
(1)
LT
10
LT
02
LT
02
LT
8
LT
15
LT
1
LT
1
LT
3
LT
4
LT
6
Cumulative lead time = 23 days

11. Decoupling points
Handle
Seat
Wheel
Tire Rim
Bicycle
(1)
Wheel
(2)
Seat
(1)
Handle
(1)
Nut
(25)
Bolt
(5)
Rim
(2)
Tire
(2)
Handlebar
(1)
Stem
(1)
LT
10
LT
02
LT
02
LT
8
LT
15
LT
1
LT
1
LT
3
LT
1
LT
6
Decoupled lead time = 10 days

12. Buffer Levels
After you've identified your decoupling
points (key items that you will strategically
keep in stock), you must decide how much
stock (buffer) you will keep at each of them.
This task is the second step of Demand
Driven Materials Resource Planning
(DDMRP)

13. Buffer levels
Green zone
Yellow zone
Red zone
Minimum order
quantity
Reorder point
Maximum
quantity
Minimum order quantity (or)
Average daily usage * Order cycle (or)
Average daily usage * decoupled lead time* lead time factor
Average daily usage * decoupled lead time
Red base = average daily usage *decoupled lead time * lead
time factor
Red safety = red base * variability factor
Max
of
Sum
of

14. Average daily usage
7
14
22
12
10
5
10
28-SEP 29-SEP 30-SEP 1-OCT 2-OCT 3-OCT 4-OCT
Nut daily usage System calculates average daily usage
in 3 approaches:
Consider 3 days
• Average daily usage(past)=
(14+7+9)/3 = 10
• Average daily usage (forward) =
(22+12+10)/3= 14.67
• Blended daily usage =
(14+7+9+22+12+10)/6=12.33

15. Zone calculation factors
Lead time factor Variability factor
0.20-
0.40
0.41-
0.60
0.61-
1.00
0.20-
0.40
0.41-
0.60
0.61-
1.00
Long lead
time
Medium
lead time
Short lead
time
Low
variability
Medium
variability
High
variability
0.50
0.50

16. Buffer level calculations
Average daily usage * decoupled lead time Yellow zone = 10*10 = 100 each
Red base = average daily usage *decoupled lead time * lead
time factor
Red safety = red base * variability factor
Red base = 10*10*0.50 = 50
Red safety = 50*0.5= 25
Red zone = 50+25= 75 each
Minimum order quantity (or)
Average daily usage * Order cycle (or)
Average daily usage * decoupled lead time* lead time factor
Minimum order quantity = 10
or
10 * 0= 0 ea
Or
10*10*.5 = 50 each
Green zone = 50 each

17. Buffer level calculations
75
100
50
Minimum quantity = 104
Reorder point = 175
Maximum quantity= 225

18. Dynamic Adjustments
Dynamic adjustments let you apply a demand adjustment
factor during periods of high or low demand. This factor
multiplies the ADU in all calculations for the selected
period. The buffer zones are then modified in turn. You will
usually apply this factor after you generate your initial
buffer values, so that you can fine-tune them over time and
in response to changing conditions. This task is the third
step of DDMRP.

19. Demand Driven Planning
Fourth step for Demand driven planning and generate
planned orders for items that are setup as decoupling
points

20. Using DDMRP to generate planned orders
Minimum quantity = 104
Reorder point = 175
Maximum quantity= 225
Net flow = on hand + on order – qualified demand
Net flow

21. Qualified demand
Qualified demand= demand past due + today’s demand +
qualified order spikes
Order spike threshold = 13
Qualified demand = 7+14+22= 43
7
14
22
12
10
5
10
28-SEP 29-SEP 30-SEP 1-OCT 2-OCT 3-OCT 4-OCT
Bicycle demand

22. Visual and collaborative execution
How to monitor your Demand Driven Material
Requirements Planning (DDMRP) decoupling points,
buffer zones, planned orders, and history. visually track
how buffers, on-hand quantities, and net-flow levels
change over time for any selected released product

23. DDMRP and MRP in D365 SCM
MRP DDMRP
Exploding multi-level
BOM’s
Exploding starts at
decoupling point
Relies on forecast Doesn’t rely on forecasts
Nets to zero Never nets to zero
Due date-focused Priority based focused
Dependency Independency
DDMRP in D365 SCM
 Additional functionality in Master planning
module
 Only compatible with planning optimization
engine
 No additional cost or licenses required

24. THANK YOU!