DDMRP

Demand Driven Material Requirements Planning (DDMRP) is a planning and execution approach for supply chains that aims to reduce lead times and inventory while improving service levels by decoupling variability at strategic points in the network. It extends traditional MRP by focusing on real demand signals and by protecting the flow of work through multi-echelon inventories with buffers.

DDMRP rests on five core components: strategic inventory positioning, buffer profiles and levels, demand-driven net flow, visible and collaborative execution, and dynamic adjustments. Strategic inventory positioning places buffers at selected points in the supply chain to decouple variability and protect important lead times. Buffer profiles and levels specify the quantity, position, and age of stock to maintain at each buffer, using factors such as variability, lead times, and service targets. Demand-driven net flow uses actual demand and consumption data to trigger replenishment, rather than relying solely on forecasts. Visible and collaborative execution provides real-time visibility and shared planning among suppliers, manufacturers, and distributors. Dynamic adjustments continuously recalibrate buffers in response to changes in demand, supply, and lead times.

Implementation typically involves extensions to ERP or supply-chain planning software to calculate buffer levels and decoupling points, supported by data governance, training, and process changes. Reported benefits include reduced bullwhip effect, lower overall inventory, shorter lead times, and improved on-time delivery. DDMRP is applied across manufacturing, distribution, and mixed environments, with adoption varying by industry and maturity. Critics note that success depends on data quality, change management, and alignment of organizational roles and metrics.