This document contains several case studies and examples of companies that implemented Demand Driven Material Requirements Planning (DDMRP). Key results of DDMRP implementation included reducing inventory levels by 20-60% while improving on-time delivery and customer fill rates. For example, an industrial ingredients division reduced make-to-order lead time by 60% and inventory by 20% while achieving 100% on-time delivery.

1. 1
DDMRP
Case
Studies
from
the
Demand
Driven
Ins7tute
All
material
and
content
©
copyright
2014
Demand
Driven
Ins7tute.
All
rights
reserved.
Cer7fied
Demand
Driven
Planner
(CDDP)
is
a
trademark
of
the
ISCEA

2. Industrial
Ingredient
Division:
• 60%
reduc7on
in
make
to
order
lead
7me
• 100%
On-­‐Time-­‐Delivery
• 20%
reduc7on
in
inventory
2
Oregon
Freeze
Dry
Case
Study
Mountain
House
Division:
• Sales
increased
20%
• Customer
Fill
Rate
improved
from
79%
to
99.6%
• 60%
reduc*on
in
inventory
Raw Material
No out of stock
Reduced inventory $2.5M+
All
material
and
content
©
copyright
2012
Demand
Driven
Ins7tute.
All
rights
reserved.
Cer7fied
Demand
Driven
Planner
(CDDP)
is
a
trademark
of
the
ISCEA

3. 3
All
material
and
content
©
copyright
2013
Demand
Driven
Ins7tute.
All
rights
reserved.
Cer7fied
Demand
Driven
Planner
(CDDP)
is
a
trademark
of
the
ISCEA

4. DDMRP
MRP
4
LeTourneau
Case
Study
All
material
and
content
©
copyright
2012
Demand
Driven
Ins7tute.
All
rights
reserved.
Cer7fied
Demand
Driven
Planner
(CDDP)
is
a
trademark
of
the
ISCEA

5. Forestry
Products
Mining
Products
5
C
C
Distortions &
amplification in
demand requirements
reverberate backward
Steel
Products
Component
Supply (H/
L)
Offshore
Products
C
Suppliers
Supply Variability
C
Drilling
Systems
C
Synchroniza7on
and
Flow
Challenge
C = Customer
= Remote Location
Demand /
Information
Variability
End Item Assembly
inherits the amplifying
upstream variability.
Lead Time before DDMRP

6. 6
= Strategic Replenishment Buffers
Suppliers
= Time Buffer
SP CS
FP
MP
OP
C
C
C
C = Customer
DS
C
= Remote Location
C
DDMRP
Design

7. DDMRP
(Longview)
vs.
MRP
(Houston)
High Inventories
Shortages
Massive Expedites
7
700
700
Stock-­‐600
outs
reduced
by
over
66%!
500
400
300
200
100
0
Dec '01 Dec '02 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 Dec '08 Sep
'09A
$Millions
Longview Inv Longview TR
600
500
400
300
200
100
0
Dec '01 Dec '02 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 Dec '08 Sep
$Millions
Houston Inv Houston TR
Low Inventories
High Service
Fewer Expedites

8. Before
Demand
Driven
–
FMCG
Example
(soap)
8

9. Before
Demand
Driven
–
FMCG
Example
(soap)
Purchase Orders Planned Orders (MRP)
9
Raw
Pack
Mix Room
Pack 1
Pack 2
Pack 3
DC
DC
DC
DC
50+ Days
Manufacturing Orders
Expedites/
Schedule
Break-ins

10. DDMRP
Design
–
FMCG
Example
(soap)
Manufacturing Orders Stock Transfer Orders
10
All
material
and
content
©
copyright
2013
Demand
Driven
Ins7tute.
All
rights
reserved.
Cer7fied
Demand
Driven
Planner
(CDDP)
is
a
trademark
of
the
ISCEA
Raw
Pack
Mix Room
Pack 1
Pack 2
Pack 3
DC
DC
DC
DC
9 Days
HUB
3-8 Days
Purchase Orders

11. Immediate
Results
for
Materials
–
FMCG
(soap)
11
300
Materials
are
buffered
without
increase
in
RPW
inventory.
This
is
accomplished
with
18%
less
total
RPW.
Dampened
the
bull
whip,
now
opera*ng
more
effec*vely,
with
less
working
capital
Before
Replenishment lead time has been After
reduced 82% to 9 days from 50 days,
becoming Responsive
Finished Goods dropped 45+%
with consistent services level at
or above 99.7%