Written by Elizabeth A. Britton
Marketing and Communications Specialist
Demand Driven Technologies
On my first day at Demand Driven Technologies, I remember sitting in the conference room, anxiously waiting to see what new opportunities this job would bring. As a marketing and communications specialist, I had no idea that taking a Demand Driven Planner (DDP) course would be one of those opportunities.
When it was first suggested to me that I take the DDP program, I was apprehensive. My expertise has been in marketing, where I focus on helping Demand Driven Technologies put its best foot forward. I have no supply chain management experience, and, at the time, I had no idea how to even get started. Still, I was excited to learn and agreed to take the DDP program.
Joining me on my Demand Driven Materials Requirement Planning (DDMRP) course was our Vice President of Sales, Sean Banks, and Danny Mashburn, our NetSuite Developer. Our instructor, Paddy Ramalyengar, a Senior Consultant at Demand Driven Technologies, waited for us with a PowerPoint presentation and two large and intimidating books to go through.
I briefly riffled through the second edition of Demand Driven Material Requirements Planning (DDMRP) and the Demand Driven Planner workbook anxiously. At first glance, I felt like my brain was going to burst from all the diagrams and number crunching I was seeing. Paddy Ramalyengar, seeing my wide eyes, quickly dove into explaining the history and methodology of DDMRP.
Essentially, many manufacturing companies use a method called Material Requirements Planning (MRP). MRP uses material and inventory data along with a forecsast to calculate the requirements for materials.
MRP was conceived in the 1950’s (back when poodle skirts were a thing) to help companies cope with complicated calculations about what and how much they needed to buy. In 1960, it was created, and then in the 1970’s, it was launched into the world. This method hasn’t really changed since the ‘70’s, which is a bit problematic considering how much companies and their needs have changed over the years.
Because the methodology hadn’t changed since 1970, three key problems started to surface. The first is the return on asset degradation, the second is the work-around proliferation, and the third is the bi-modal inventory distribution. The business reality is that after MRP was popularized, companies in the United States were not generating enough return on their assets. Companies were forced into using workarounds, Ad Hoc tools, and spreadsheets to fill the gaps in MRP.
Thus, DDMRP was born to combat these issues. According to the Demand Driven Institute: “Demand Driven Material Requirements Planning is a formal multi-echelon planning and execution method to protect and promote the flow of relevant information through the establishment and management of strategically placed decoupling point stock buffers.”
Let me break that down: DDMRP uses actual consumption data to establish inventory positions. It doesn’t use a forecast, it uses true market demand.
The DDP course that I sat through not only went through the history of DDMRP but also taught me the methodology and the math behind it. To learn more about DDMRP methodology, visit the Demand Driven Institute.
“The Demand Driven Planner workshop was one of the most enjoyable training experiences I’ve had in a long time,” Sean Banks says, “What I think is really powerful about this workshop is how the content is easy to understand whether you are an industry veteran or are just getting started in supply chain. The concepts just make sense! I left the workshop confident in my understanding of DDMRP and ready to take on the challenge of the Demand Driven Planner certification!”
I couldn’t agree more. I entered that DDP course with no supply chain background and came out knowing so much more about the industry. The lessons I learned throughout the course will benefit me greatly as I move forward with my marketing efforts in the demand driven world. I am so grateful for not only a fantastic DDP teacher, but also to work for a company that is so invested in furthering my professional skills.
If you’re a newbie to DDMRP like I am, you might want to check out our upcoming webinar: “Introduction to Demand Driven MRP and Replenishment+.”