What is DDMRP and What are the Benefits of Implementing Demand Driven Material Requirements Planning for Dynamics 365 F&O?

Do you struggle with supply chain disruptions? If so, it's time to consider adopting Demand Driven Material Requirements Planning (DDMRP). Luckily, DDMRP capabilities are available for Microsoft Dynamics 365 Supply Chain Management (Dynamics 365 F&O) customers. Current supply chain issues have made it clear there is a worldwide systemic crisis in how companies manage supply and demand. For decades Material Requirements Planning (MRP) has helped track manufacturing materials and components. Recently, successful manufacturers and distributors have made adjustments to MRP leveraging technology to help prevent stockouts and overstocks.  Learn how DDMRP can benefit your business.

DDMRP Explained

DDMRP is the next generation of planning and delivering goods on time despite possible shortages of supply that disrupt the manufacturing process and delivery time.  Common reasons for supply chain disruption are:

1. Longer lead times from overseas sourcing
2. Market fluctuation (sometimes inaccurately forecast)
3. Customers are demanding products with less lead time

DDMRP is described by Microsoft with "five sequential components (steps). The first three components essentially define the initial and evolving configuration of a demand-driven material requirements planning model. The last two components define the day-to-day operation of the methodology.

1. Strategic inventory positioning – Identify decoupling points in the supply chain network. Decoupling points are specific points of your supply chain where you put an inventory buffer that you will monitor and replenish.
2. Buffer profiles and levels – For each decoupling point, identify the buffer sizes (minimum quantity, maximum quantity, and reorder point) and the reorder quantity.
3. Dynamic buffer adjustments – Adjust buffer levels, based on varying operating parameters or planned future events.
4. Demand-driven planning – Generate supply orders as they are required. These supply orders include manufacturing orders, purchase orders, and stock transfer orders
5. Highly collaborative and visible execution – Run the supply orders with the help of visualization."

DDMRP is typically used by manufacturers that have a multi-level bill of materials (BOM). However, it can also be applied to distribution and retail networks."

5 Benefits of Adopting Demand Driven Material Requirements Planning for Dynamics 365 F&O

If you have a DDMRP solution in place, you will be able to respond to the requirements of the market while making quicker and more accurate decisions in planning supply and executing day-to-day operations. Demand Driven Material Requirements Planning for Dynamics 365 F&Owill offer the following benefits:

1. Improve customer service to consistently reach on-time order fulfillment rates
2. Compress lead times across several industry segments
3. Optimize inventory to enable inventory reductions without impacting service levels
4. Improve planner accuracy by providing visibility of priorities instead of constantly fighting the conflicting messages of MRP
5. Manage a predictive and resilient supply chain

3 Benefits of Demand Driven Material Requirements Planning for Microsoft Dynamics 365 F&O

DDMRP is integrated within the existing planning configurations in Dynamics 365 F&O and is used in concert with those setups to create the most useful planning configuration for your business. It is not a new module, and it does not replace existing, on-board planning functionality.

1. Planning Optimization Add-in - It's now available from Microsoft and moves master planning calculations outside of Dynamics 365 F&O, therefore, reducing planning runtimes from hours to minutes. The Planning Optimization Add-in introduced the function of priority-based planning to allow businesses to differentiate demand based on urgency.
2. Microservices - Like the Planning Optimization Add-in, Microservices is just one way to increase value from an ERP migration to the cloud quickly. You will see the benefits like better performance by offloading workloads to the cloud and improving resiliency by allowing you to react to changing demand in real-time. Ultimately, these investments will help you mitigate stockouts and lower the cost of your on-hand inventory. Microsoft DDMRP provides all that while ensuring that more customer orders are fulfilled on time and accurately.
3. DDMRP is included with Microsoft Dynamics 365 F&O - Since it's included, it requires no additional license fees. DDMRP functionality has also been added to the existing Master planning module of Supply Chain Management but requires you to also use the Planning Optimization Add-in.

Download this complimentary ebook that includes a self-assessment for any manufacturing company that needs to reduce costs, improve quality and enhance productivity. 

The reality is that supply chain disruption and shortages are here to stay for reasons that may never have a solution.  Implementing DDMRP in Dynamics F&O will help manage demand and balance your supply.

Rely on a Microsoft Dynamics 365 Expert

Clients First consultants have direct experience in the industries we support. The Clients First Texas office specializes in manufacturing, job shops, maintenance, repair, and overhaul (MRO) for aviation or heavy equipment organizations. We have customers in other industries, too, including make-to-order/engineering job shops, project manufacturing, field services, and wholesale distribution.

Nothing replaces a live presentation so please contact us to schedule a demonstration for your business. We support ProMRO with leading Cloud ERP solutions Acumatica and Microsoft Dynamics 365 Finance and Supply. We also support Dynamics 365 Business Central and have a deep knowledge of legacy ERP solutions like Dynamics AX (formerly Axapta) and Dynamics NAV (formerly Navision).

We’re a Microsoft Gold ERP Partner, a Certified Cloud Service Provider (CSP), and an Acumatica Gold Partner.

Please email our office in Dallas/Fort Worth, Texas, or call  800.331.8382. We're based in Dallas, Texas while servicing companies worldwide.

Additional Resources:

Solutions for the Supply Chain Breakdown

6 Dynamics 365 Supply Chain Updates in 2022 R2

Mitigate Supply Chain Impacts with Manufacturing ERP

Six Supply Chain Transformation Trends for Manufacturers

eBook: Smart Maintenance for Today's Supply Chain

What's New in Dynamics 365 Supply Chain

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