Below is a list of features that we believe to be unique and distinctive to DDMRP. These features
are at the heart of what makes DDMRP different and distinct from Lean, DBR (TOC) and
conventional MRP/ERP. Additionally, these features also represent the innovations to bridge the
world of formal planning (MRP/ERP) to leverage the world of Lean and DMR(TOC) and take
results beyond what is possible with Lean or DBR (TOC). None of these features are defined in
the 14th edition of the APICS dictionary. Each feature is unique to DDMRP.
Exclusive DDMRP Feature Explanation
Available Stock Equation/Position
Planned Adjustment Factors (PAF)
Decoupled Explosion
Qualified Order Spike Horizon and
Threshold
ASR Lead Time (ASRLT)
Projected Buffer Status Alert
Material Synchronization Alert
Lead Time Managed Parts
Lead Time Alert
Prioritized Share
Buffer Profile
The available stock equation incorporates open supply, on-hand and
specifically qualified sales orders or work order demand allocations.
This is distinctly different than the conventional available to promise
(ATP) equation. The relative available stock position is impacted by
the use of Planned Adjustment Factors.
Planned Adjustment Factors are applied to calculated usage to affect
some or all of the buffer zones dynamically resizing (depending on
Minimum Order Quantity and Minimum Order Cycle qualification).
Decoupled Explosion in combination with ASRLT creates a blend of
independence and dependence in planning scenarios. Traditional
MRP is dependent throughout the bill of material.
The order spike qualification method of DDMRP is used to identify a
demand or accumulation of demand to be combined into the
available stock position and equation.
ASR Lead Time represents a qualified cumulative lead time –
specifically the longest planning chain in the network. The concept
does not appear in any of the conventional Lean, TOC or MRP/ERP
literature.
This alert identifies a projected stock position against DDMRP
calculated buffers in the short term horizon. This alert is
fundamentally different than the traditional projected available
balance.
Material Synchronization Alert compares the timing and quantity
associated with horizontal dependent demand and open supply
compared with the vertically dependent projected on-hand position
moving forward in time. It is most commonly triggered by a parent
demand allocation for the vertical dependent items for which there
will be insufficient supply to cover the requirement at the time of the
parent order release. This alert is not available in any commercially
available MRP/ERP system.
LTM parts are strategic non-buffered items that leverage a process of
pre-expediting
This alert allows strategic non-buffered items to be tracked for
incoming synchronization issues.
The allocates inventory to forward locations based on the
comparative available stock positions expressed as a percentage of
buffer available
The term “buffer profile” is uniquely calculated according to DDMRP
rules and logic behind each of the 5 specific zones.
Critical Note: a DDMRP “buffer” the Lean term “kanban”, and the TOC DBR “buffer” are NOT
interchangeable. Kanbans are comprised of WIP while DDMRP buffers are order independent.
Critical Note: a DDMRP “buffer” and “safety stock” in the context of master scheduling are NOT
interchangeable. DDMRP buffers must pass five tests with the only exception being “replenished
over-ride” buffers. Safety stock is a static quantity that redefines the expected lowest level of
inventory. This is a requirement that is placed either in the current time frame or at the end of the
demand time fence. Most significant is the difference in the planning method where MRP
attempts to match quantity and timing of requirements and replenishments to drive the planned
inventory to zero (or safety stock). DDMRP never plans to drive inventory to zero.
Below is a glossary of DDMRP terms that will affect UI development. Some of these terms (or
variants) will be deemed critical.
DDMRP Glossary of Terms
average daily usage (ADU) - average usage of a part, component or good on a daily basis.
ADU alert - an alert indicating a significant change in ADU within a defined set of parameters (quantity and time).
ADU alert horizon - a defined shorter rolling range within the broader rolling horizon used to calculate ADU.
ADU alert threshold - a defined level of change in ADU that triggers the alert within the ADU Alert Horizon.
ADU based recalculation - a process of dynamically adjusting strategically replenished buffers incorporating a rolling
horizon.
artificial batch - any batch that is not equal to actual demand
ASR equilibrium - the point of indifference between the investment in adding stock positions (typically component parts)
and the lead time inventory compression resulting from that investment (typically parent items).
ASR Lead Time (ASRLT) - a qualified cumulative lead time defined as the longest unprotected/unbuffered sequence in a
bill of material.
available stock - a planning calculation to determine the planning status of a stocked item. The equation is on-hand +
on-order stock (also referred to as open supply) - unfulfilled qualified actual demand. If the available stock equation yields
a position in the green zone of a buffer then typically no planning action is required. Available stock is calculated only in
the current time period.
buffer penetration - the amount of remaining buffer typically expressed as a percentage.
buffer profile - a globally managed group of parts with similar lead time, variability, control and order management
characteristics
buffer zone - a stratification layer within a stock buffer. Typically buffer zones are color coded with red, yellow, and green
assignments. DDMRP adds two additional zones of blue and dark red.
current on-hand alert - an execution alert generated by on-hand penetration into a buffer. Typically, on-hand alert will be
set for red zone penetrations and out of stock situations.
Demand driven material requirements planning (DDMRP) an innovative multi-echelon planning and execution method
that enables a company to build more closely to actual market requirements by sensing and adapting to changes in
customer demand patterns
decoupled explosion - the cessation of bill of material explosion at any buffered/stocked position.
dynamic buffers - buffer levels that are adjusted either automatically or manually based on changes to key part traits.
green zone - the top layer of a replenished and replenished over-ride buffer. If available stock is in this zone then no
additional supply is created. The quantity in the green zone will dictate the minimum reorder quantity.
lead time managed (LTM) part - a critical non-stocked part that will have special attention paid to it over its execution
horizon. Typically LTM parts are critical, long lead time components that do not have sufficient volume to justify stocking.
A portion of the lead time of the part (typically 33%) will have a three zoned pre-expediting warning applied to it. That
portion is typically divided into three equal sections.
lead time alert - an alert/warning generated by an LTM part. An alert will be triggered whenever the part enters a
different time zone of its buffer. Green is the first alert to be encountered, follow by yellow and then red.
lead time alert zone - the zone associated with the percentage of lead time of that provides the definition for lead time
alerts. The LTM alert zone has three equal sections color coded green, yellow, red.
market potential lead time – the ASR lead time that will allow an increase of price or the capture of additional business
either through existing or new customer channels
material synchronization alert - an alert generated by the earliest occurrence of a negative on-hand balance within at
least one ASRLT where open supply receipt is due after required demand date.
non-buffered part - all parts that are not stocked.
on-hand alert level - the percentage of the red zone used by buffer status alerts in order to determine a yellow or red
color designation.
order spike horizon - a defined future time frame used to qualify order spikes in combination with an order spike
threshold. Typically order spike horizon is set to one ASRLT.
order spike threshold - a defined amount used to qualify order spikes in combinations with an order spike horizon.
Typically the order spike threshold will be expressed as a percentage of the total red zone (or min value) of a part's buffer.
over top of green (OTOG) - a situation in which either available stock or on-hand is over the top of defined green zone
indicating an excessive inventory position. This is normally colored light blue in the five color buffer system.
planned adjustments - manipulations to the buffer equation that affect inventory positions by raising or lowering buffer
levels and their corresponding zones at certain points in time. Planned Adjustments are often based on certain strategic,
historical and business intelligence factors.
prioritized share - The specific DDMRP feature that allocates inventory to forward locations based on the comparative
available stock positions.
projected buffer status alert - an alert generated by projected on-hand positions over the a part's ASRLT of the part
based on on-hand, open supply and either actual demand or ADU.
qualified actual demand - the demand portion of the available stock equation comprised of qualified order spikes, past
due demand and demand due today.
qualified order spike - a quantity of combined daily actual demand within the order spike horizon and over the order
spike threshold.
ramp down adjustment – planned adjustment factor manipulations to the buffer equation that affect inventory positions
lowering buffer levels and their corresponding zones at certain points in time. Ramp down adjustments are typically used
in part deletion.
ramp up adjustment – planned adjustment factor manipulations to the buffer equation that affect inventory positions
raising buffer levels and their corresponding zones at certain points in time. Ramp up adjustments are typically used for
part introduction.
red zone - The lowest level zone in a replenished and replenished over-ride part buffer. The zone is color coded red in
order to connote a serious situation. The red zone is the summation of the calculated red zone safety and red zone base.
red zone base - the portion of the red zone sized by lead time factors.
red zone safety - the portion of the red zone sized by variability factors.
relative priority - the priority between orders filtering by zone color (general reference) and buffer penetration (discrete
reference).
replenished part - a strategically determined and managed part using a dynamic three zoned buffer for planning and
execution. Buffer zones are calculated using buffer profiles, ADU and ASRLT.
replenished over-ride part - a strategically determined and positioned part using a static (buffer zones are manually
defined) three zoned buffer for planning and execution. Planned adjustments, however, can be used with these buffers.
significant minimum order quantity - a minimum order quantity that sets the green zone of a buffer if it is greater than
the calculated green zone
strategic inventory positioning - the process of determining where to position inventory that will best protect the system
against various forms of variability in order to best meet market needs by reducing response time and leverage working
capital.
top of green (TOG) - the quantity of the top level of the green zone. TOG is calculated by the sum of red, yellow and
green zones.
top of red (TOR) - the quantity of the top level of the red zone
top of yellow (TOY) - the quantity of the top level of the yellow zone. TOY is calculated by the sum of the red and yellow
zones.
yellow zone - the middle layer of the buffer level coded with yellow in order to convey a sense of warning. The yellow
zone is the rebuild zone for replenished and replenished over-ride buffer.
Below is a comparison chart of the DDMRP to prevailing planning and execution methods.
DDMRP
ERP/MRP
Kanban/Super
Spreadsheets
5 Zone Buffers
YES
RARELY
NO
RARELY
Dynamically Adjusted Buffers
YES
SOME
SOME
SOME
Planned Adjustments to Buffers
YES
YES, but1
NO
RARELY
Relative Priority Based on Buffer Status
YES
NO
NO
RARELY
Globally Managed Buffer Profiles
YES
NO
NO
NO
Decoupled BoM Explosion
YES
YES, but3
YES, but2
NO
ASR Lead Time Calculation
YES
NO
NO
NO
Qualified Order Spike Horizon and Threshold
YES
RARELY
NO
RARELY
Material Synchronization Alert
YES
YES, but4
NO
NO
Multi-Location Buffer Status Visibility
YES
SOME
SOME
RARELY
Lead Time Managed Parts
YES
NO
NO
NO
Matrix BoM + ASR Lead Time Analytics
YES
NO
NO
NO
Simple and Visible
YES
RARELY
YES
YES, but5
YES, but1 (Planned positions are often forecast driven and, thus, not integrated into a demand driven framework)
YES, but2 (Kanbans have no recognition of the BoM, they simply treat every connection as independent and factor only on-hand and on-order stock
positions)
YES, but3 (While almost every MRP system has the ability to do what is called “two level master scheduling,” it requires someone with extensive MRP
background and is a very advanced technique. We have never seen it successfully implemented)
YES, but4 (Shortage lists are typically limited to current and past shortages not future potential misalignments)
YES, but5 (Most homegrown systems are simple and visible ONLY to the person who uses the tool)