A presentation by Stefano Drigo, CDDP, CSCP, Technical Manager, Hypress Africa, South Africa and Tony Rice BA, Independent Consultant, Production-Scheduling.com, South Africa. Delivered during the 38th annual SAPICS event for supply chain professionals at Sun City, South Africa. Hypress Africa is a subsidiary of an Italian company, distributing hydraulic hoses and fittings into the Southern African market. With over 3200 SKUs, and lead times varying from 4 days to 140 days, things just needed to change. We needed a way to size, plan and manage our inventory correctly. We take you through our journey of implementing DDMRP, looking at the challenges faced and what has worked and what hasn’t worked.

1. DDMRP - South Africa
shows Europe the Way
A Case Study
Stefano Drigo & Tony Rice

2. Contents
• Introduction
• DDMRP Implementation
• Results of DDMRP
• Excel DDMRP Program
• Questions

3. Introduction

4. Complexities and challenges faced:
• Customer tolerance lead time
• Long lead time
• Inventory demand management
• Slow moving stock
• Future demand visibility
• Supply chain integration

5. DDMRP Implementation

6. 1 Strategic Inventory Positioning

7. 2 Buffer Profile And Levels
• Inventory items
• Lead times
• Average Daily Usage (ADU)
• Order cycle MOQ
Lead Time
Number of SKU’s
Jet Park Cape Town
1 Days 416 -
4 Days 628 -
6 Days - 1255
30 Days 12 -
56 Days 105 -
140 Days 881 -
Parameter Factor Up to - Days Factor Range
Long Lead Time 30% 1000000 20 - 40%
Medium Lead Time 50% 42 41 - 60%
Short Lead Time 90% 14 61 - 100%
High Variability 80% 61 - 100%
Medium Variability 50% 41 - 60%
Low Variability 20% 0 - 40%
Order Spike Threshold 50% Of Red Zone

8. Typical buffer profiles

9. 3 Dynamic Adjustments
• Seasonality
• Promotions
• Product introduction
• Product end of life

10. 4 Demand Driven Planning

11. Updating and management of
open orders

12. 4 Visible Collaboration and
Execution
Open order management and scheduling of containers

13. Potential Stock Outs

14. SKU 2888 Lead Time 4 Days

15. SKU 0054 Lead Time 6 Days

16. SKU 3000 Lead Time 30 Days

17. SKU 3170 Lead Time 56 Days

18. SKU 3062 Lead Time 140 Days

19. Results
SKU Per zone Distribution Count
Average monthly service level has Improved from 95.43% to 97.5% in 9 months

20. Cape Town Yearly Turnover vs Average Yearly Inventory holding
DDMRP has managed to reduce our average yearly inventory holding in Cape town by 23% in 9 Months

21. DDMRP with Excel
• Excel Development Template – 4GL
• Data – Calculations – Reporting
• Extracts from ERP/accounting system
• Data stored in text files – NOT Excel
• Calculating engine, not data store
• One data table per sheet

22. Large data volumes in Excel
• Formulas on 1 row – paste down macro
• Multiple workbooks – “modules”
• Exchange of data via text files
• Controlled by “Master module”

23. Excel Based DDMRP – Data Flow
Data
Interface
Parameters
ERP
Calculating
Engines
Reports
Text
Files

24. Demo of Text Files Being Created

25. Questions

26. Thank You