DDMRP: Significantly improving Customer Service Levels into the 21st century

Ever wondered why most forecasts and customer service miss the mark, some by metres but many by a mile? According to author and Demand Driven Material Resources Planning (DDMRP) guru Carol Ptak, it’s because the formal planning systems that most people use are fatally flawed.

How so? In essence, it’s because they use history as a basis for planning the future. But, the good news is that by going to greater lengths to understand the new concept of DDMRP, one can begin to service customers with greater levels of accuracy than ever before with shorter lead times and with reduced levels of inventory even in an FMCG context!

“Demand Driven MRP is a powerful way to create flow in the supply chain, one of the major issues that companies face in an increasingly competitive and more complex environment” says Steven Montgomery General Manager of Logistics of ABE Construction Chemicals. “It does this by remodeling your supply chain through strategic positioning of inventory and linking to a pull from customer demand, instead of the traditional push and promote methodology found in many companies today” he explains.

Forecasting and DDMRP in an FMCG environment
The insights of Montgomery and many other experts in forecasting and DDMRP will be available to you at the SAPICS 2015* conference, taking place from 31 May - 2 June at Sun City. Here’s a foretaste of what you’ll be able to learn over just a few days.

Forecasting & FMCG
During his talk entitled: Forecasting lessons from FMCG aisles, Barnton MD Thinus Hermannn will take participants on a virtual trip to a grocery store, pointing out the insights that can be gleaned there. “There’s lots to learn in every aisle, comparing the behaviour of different pack sizes of the same product, across a range of products,” he says. “And just when you think you’ve got it all figured out, I’ll challenge you to dig deeper into sales in the take away industry, which helps us refine forecasting month ends amongst others.” 

An excellent case study on the Shoprite transformation over the past 20 years will be presented by Industrial Logistic System’ co-founder, Gary Benatar. The presentation tracks the journey since Shoprite adopted central distribution in 1993 as a key strategy to growth and efficiency for the consumer.  “Participants will learn exactly how the strategy was implemented, how it has evolved and matured to allow Shoprite to become the largest retailer in SA and in Africa,” he says. “If you want to learn how Shoprite succeeded in totally reengineering the FMCG market space with respect to supply chain, don’t miss this talk!”

DDMRP and the Journey towards Supply Chain Maturity
Creating ‘flow’ in supply chain is a function of its ability to create network wide visibility, and most importantly, a conscious effort to move towards a culture of planning and demand driven systems.

In his paper on ABE Construction Chemicals’ journey to true customer excellence, entitled DDMRP and the Journey towards Supply Chain Maturity, Montgomery will look at DDMRP in the context of a journey. 

“The first thing participants will learn is how to put some fundamentals in place:  Defining demand; getting visibility on over- and under-stock positions; seeing the implications of a bi-modal stock distribution. These initial steps show what a company might need to get in place before they approach a DDMRP implementation,” he says. “The talk will also describe the role that supporting systems and methodologies have played in the journey to customer service improvement and our continued efforts to drive our business to new heights which we believe can be achieved through a successful DDMRP implementation.”

Supply chain simulation
With a solid theoretical foundation in place, management consultant, MD at Life Science Associates and partner at Production-Scheduling.com, Kien Leong will run a simulation of a supply chain planning system using DDMRP.

“Demand Driven MRP is designed to support material and inventory planning at a full scale of operation.  This means addressing hundreds of products, produced and purchased items,” he says. “To deploy DDMRP in the real world, you will need the help of computers to manage all of that information.  This workshop will give access to such a planning system.”

During the simulation, participants will have a go at making important decisions on selecting product families and Buffer Profiles.  “The planner needs to choose a method to determine Average Daily Usage (ADU), Planned Adjustment and Variability Factors,” he says. “These inputs will then determine how well the DDMRP system will perform.”

Bringing it all together with three in-depth case studies will be Erik Bush, CEO of Demand Driven Technologies. “Today, nearly every home in the United States has a product in it that passes through the Unilever DDMRP implementation,” says Bush, referring to the kinds of insights participants will gain from attending his talk.

Delegates will also learn from a range of case studies from some of the best known global organisations.

Want to find out more? Catch these speakers and more at SAPICS 2015*.
For more information on the 37th Annual SAPICS Conference & Exhibition, being held at Sun City from 31 May – 2 June 2015, please visit http://conference.sapics.org/

ENDS
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MEDIA CONTACT: Cathlen Fourie, 012 644 2833, cathlen@thatpoint.co.za, www.atthatpoint.co.za

For more information on SAPICS please visit:
Website: www.sapics.org.za
Twitter: @SAPICS01
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ABOUT SAPICS – your supply chain network
SAPICS is a professional knowledge-based association that enables individuals and organisations to improve business performance. SAPICS builds operations management excellence in individuals and enterprises through superior education and training, internationally recognised certifications, comprehensive resources and a countrywide network of accomplished industry professionals. This network is ever expanding and now includes associates in other African countries.

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