Solution Summary Digital Supply Chain Demand Driven Replenishment How can SAP® solutions enable you to change the game? Changing the game often means changing the way you think and behave, challenging historical and deeply ingrained business practices. In a linear planning and execution world driven by traditional MRP companies find themselves locked into certain outcomes like continually increasing inventory investment and service level challenges that are natural by-products of that methodology. SAP Integrated Business Planning for demand-driven replenishment supports a methodology known as Demand-Driven MRP or simply DDMRP that re-defines the way we think and behave in supply chain planning. DDMRP is designed to protect and promote flow of information and materials. It is also the process for generating orders and managing them in a Demand-Driven supply chain. What do SAP solutions help customers do? Key facts Smooth Material and Information Flow Break the bullwhip effect in your supply chain and calm supply chain nervousness Replenish the Supply Chain Based on Actual Demand Minimize the impact of incorrect forecasts on your replenishment strategy Calculate Decoupled Inventory Buffers Use past material consumption and/or future forecast to determine size of inventory buffer zones Accommodate Supply Chain Uncertainty Buffer supply and demand uncertainty via de-coupling points across the supply chain Visibility Graphically track performance against buffer levels and inventory investment KPIs Exception Management Focus planners on managing buffer levels and de-coupling points and maintaining the health of the material flow through the supply chain 95+% Service Levels The goal of DDR is to enable near 100% on time delivery in full. These levels of results have been achieved by companies adopting the methodology in 20-30% Reduction Inventory Investment Truly remarkable levels of inventory reduction have been achieved when following this methodology with even best in class organizations recognizing up to 30% reductions. What are the benefits? Learn more • Reduce Inventory Investment: using strategic decoupling points and inventory buffers to control the flow of material through the supply chain reduces inventory levels while improving customer service levels. ► IBP Landing Page ► Product Documentation ► References • Improved Customer Service: Smoothing the material flow through the supply chain provides more consistency and predictability in customer delivery • Lead time compression: By decoupling supplier lead times from the consumption side of the buffer, lead times are instantly compressed. The reason is that lead times are usually over estimated down stream to make sure to account for process or lead time variability upstream. ©2020 SAP SE or SAP affiliate company. All rights reserved.
