DDMRP - Demand Driven Material Requirements Planning

Foreword
Definitions in This Book Introduction
About the Authors Acknowledgments
PART 1 PERSPECTIVE
CHAPTER 1
Planning in the New Normal
The Material Requirements Planning Revolution Evidence of a Problem
Return on Asset Performance Degradation Work-Around Proliferation
The Inventory Bimodal Distribution
The New Normal Summary
CHAPTER 2
The Importance of Flow
Plossl’s First Law
Establishing Flow as the Foundation Relevant Information and Materials The Bullwhip Effect
Summary
CHAPTER 3
Material Requirements Planning in the New Normal
What Is MRP?
Distortions to Relevant Information
Demand Signal Input Nervousness
The Weekly Bucket Flattening the Bill of Material
Distortions to Relevant Materials Common Cause Variation Delay Accumulation
Amplifying the Distortions to Relevant Information and Materials— Batching Policies
Summary
CHAPTER 4
Unlocking a Solution—The Power of Decoupling
Decoupling
Decoupling Point Buffers Summary
PART 2 BECOMING DEMAND DRIVEN
CHAPTER 5
Supply Order Generation and Execution for the New Normal
MRP Versus Lean—What Can We Learn?
Dependence Versus Independence
Supply Order Generation (Planning Versus Execution) Lean and Technology
Demand Driven Material Requirements Planning The History of “Demand Driven” Position, Protect, and Pull
Summary
CHAPTER 6
Strategic Inventory Positioning
Positioning Factors
Customer Tolerance Time
Market Potential Lead Time
Sales Order Visibility Horizon External Variability
Inventory Leverage and Flexibility Critical Operation Protection
Applying the Positioning Criteria
A New Form of Lead Time
Advanced Inventory Positioning Considerations Distribution Positioning Considerations Summary
CHAPTER 7 Strategic Buffers
Inventory: Asset or Liability? Introducing Decoupling Point Buffers
The Green Zone The Yellow Zone The Red Zone
Buffer Profiles
Factor 1: Item Type
Factor 2: Lead Time
Factor 3: Variability Individual Part Attributes
Part Average Daily Usage Part Lead Time
Part Minimum Order Quantity Part Location
Calculating Replenished Part Buffer Levels and Zones The Green Zone
The Yellow Zone
The Red Zone Continuing with Company ABC
Iterations
Calculating Replenished Override Buffers Calculating Min-Max Buffers
Summary
CHAPTER 8
Buffer Adjustments
Recalculated Adjustments Planned Adjustment Factors
Demand Adjustment Factor Zone Adjustment Factor
Lead Time Adjustment Factor
Summary
CHAPTER 9
Demand Driven Planning
The Shift to Actual Demand The Net Flow Equation
Qualifying Order Spikes
Supply Order Generation Based on Net Flow Position Simulating DDMRP Supply Order Generation Calculating Average On-Hand Inventory
Average On-Hand Range Average On-Hand Target Average Open Supply Orders
Decoupled Explosion
Hybrid Model Supply Order Generation Prioritized Share Supply Order Consideration
Discount Optimization Freight Optimization Coverage Optimization
Min-Max Supply Order Generation Completing the Company ABC Example Summary
CHAPTER 10
Demand Driven Execution
Buffer Status Alerts
Challenging Priority by Due Date Planning Versus Execution Display Current On-Hand Alert
Projected On-Hand Alert
Synchronization Alerts
Material Synchronization Alerts Lead Time Alert
Summary
CHAPTER 11
DDMRP Impacts on the Operational Environment
DDMRP Strategic Buffer Criteria The Decoupling Test
The Bidirectional Benefit Test
The Order Independence Test
The Primary Planning Mechanism Test The Relative Priority Test
The Dynamic Adjustment Test
DDMRP Versus Safety Stock and Order Point Safety Stock and the Buffer Criteria Order Point and the Buffer Criteria
DDMRP Impacts on Scheduling
DDMRP and Master Production Scheduling Assumptions DDMRP Shop Floor Scheduling Implications
Finite Scheduling with DDMRP?
Additional Scheduling Sequence Impacts
DDMRP and WIP Priority Management Summary
CHAPTER 12
DDMRP Metrics and Analytics
Measuring Relevant Information (Signal Integrity)
Measuring Decoupling Point Integrity Outlying Event Reports
Measuring Velocity
Driving Improvement in DDMRP Summary
CHAPTER 13
The Demand Driven Organization
The Demand Driven Adaptive System
Demand Driven Sales and Operations Planning
Conventional Sales and Operations Planning
The Five Steps of Demand Driven Sales and Operations Planning
1. Strategic Business Management Direction and Review 2. Integrated Reconciliation
3. Managing the Portfolio and New Activities
4. Managing Demand
5. Managing Supply
Demand Driven Sales and Operations Planning Projections
Working Capital
Space
Capacity
Projected Order Frequency
Summary
Contribution of Dick Ling
CHAPTER 14
Implications for Technology
Operations and Information Technology—Two Ships Diverging in the Night?
DDMRP Software Compliance Criteria
PART 3 APPENDICES
APPENDIX A
An MRP Example
The Scenario Simulating the Scenario
APPENDIX B
Simulating DDMRP Buffers
About the Simulation
Widget Simulation Results
Gazoonk Simulation Results
Simulating the Impact of Minimum Order Quantities Summary
About the Author
APPENDIX C
Applying DDMRP to the Apparel Retail Environment
The Need for a Retail Application of DDMRP
A Retail Apparel DDMRP Example
Special Characteristics and Challenges of the Apparel Retail Environment The Proposed Model
Retail DDMRP Buffer Zone Considerations
Realized Results
About the Author
APPENDIX D
Demand Driven MRP Dictionary
APPENDIX E DDS&OP Checklist
Endnotes References Index