DRP_PGPM [Compatibility Mode]

7/31/2019 DRP_PGPM [Compatibility Mode]

1/14

3/8/20

Distribution Requirements Planning

y DRP provides the basis for integrating supply chain inventory

information and physical distribution activities with the

Manufacturing Planning and Control system.

y Managing the flow of materials between firms, warehouses,

distribution centers is a major issue in SCM. DRP helps

manage these material flows. Just like MRP did in

Manufacturing.

n s rms n e supp y c a n y prov ng p ann ng recor s

that carry demand information from receiving points to

supply points and vice versa.

DRP links to internal MPC system

At Front End: linkage is with demandmanagement which connects it with the

.

At backend: linkage with vendors


2/14

3/8/20

DRP and the Marketplace

y DRP starts in the marketplace. Some firms gather

information on inventory levels and product usage from

customers.

y This knowledge of their customer requirements provides

firms the opportunity to make-to-knowledge.

y This is specially true when they have vendor managed

inventories.

DRP Purposes:

y DRP enables the firm to capture data, including local

demand conditions, for modifying the forecast and to report

current inventory positions.

y DRP provides data for managing the distribution facility and

the database for consistent communications with the

customers and the rest of the company.


3/14

3/8/20

Supply Chain Planning Processes

Demand PlanningMaterial Requirement Planning Demand Forecasting

Su lier Plant Warehouse Lo istics Retailer

ro uc on

Plan

omponen

Requirement

DRP & Order Management

DRP & Demand Managementy Demand management is the connection between mfg. and the marketplace.

y Plans derived from the DRP information and shipping requirements are the.

y Continually adjusts changes in the demand, sending inventories from centralwarehouse to distribution centers where they are needed.

y DRP is connected to the logistics system

y By helping determine vehicle capacity planning.

y Helping loading.

y Developing vehicle dispatching.

yDetermining warehouse capacity.

y Provides the data to accurately say when availability will be improved and

delivery can be expected.


4/14

3/8/20

Supply Chain Planning Processes

Demand MgmtMaterial Requirement Planning

ro uc on

Plan

omponen

Requirement DRP

Supplier Plant Warehouse Logistics Retailer

Distribution requirements planning and the

logistic system


5/14

3/8/20

DRP and MPS

y DRP greatest payoff is from integrating records and information.y Crossing the area of inter-firm MPC systems means negotiating

.

y DRP permits evaluation of current conditions to determine ifmfg. priorities need to be revised.

y Provides the master scheduler better info to match mfg outputwith shipment needs.

Basic DRP Record

y Forecast requirements (Gross Requirements)

y In transit (Scheduled Receipts)

y Projected available balance (Available)

y Planned Shipments (Planned Order Releases)


6/14

3/8/20

Field warehouse DRP record

Forecast requirements (Gross Requirements)In transit (Scheduled Receipts)

Projected available balance (Available)

Planned Shipments (Planned Order Releases)

DRP some major applicationsy Linking several warehouse records

y Record packaging bulk materials

y Bulk material and MPS

y Records for a single SKU, one warehouse over 4 periods.

y Same for shipments logic

y Same for error add-back


7/14

3/8/20

1 2 3 4 5 6 7

Forecast requirement 15 15 15 15 15 15 15

In transit

Projected available 22 7 32 17 42 27 12 37

Planned shipments 40 40 40

Shipping=0, Safety stock =5, lead time =1

Quantity / Reorder Point Q/R Order when neededTPOP uses forecast and time phased MRP

Lead time is captured in the MPS /MRP ofthe warehouse


8/14

3/8/20

FAS= Final Assembly Schedule


9/14

3/8/20

Records for a

single SKU, one

warehouse over 4

periods

( Shipment pre-poned

due to SS shortfall)

Records for a single

SKU, one

warehouse over 4

periods with

shipment logic:

(Anticipated SS shortfalldid not trigger early

shipment)

Firm

Planned

order


10/14

3/8/20

Records for a singleSKU, one warehouse

over 4 periods with

( warning about

forecast correction

after cumulative

error> SS)

Error

addback

method

Safety Stock and DRPy When there is more uncertainty in terms of timing, then it

may be better to use safety lead time.

y When the uncertainty is in quantity then safety stock may bebetter.

y Carry safety stock where there is uncertainty (near thecustomer) or where there is some element of independentdemand {Shitao Yang pg 275}

Consider national safety stock/ transshipment (by Brown)


11/14

3/8/20

Management Issues with DRP

y Data integrity and completeness

y Organizational support

y Problem solving

Data Integrity and completeness

y broken down into detailed forecasts.

y Forecast errors should be avoided especially biased errors.

y Management programs should be established to monitor theprocess.

y Inventory accuracy depends on transaction process routines and

sc p ne.


12/14

3/8/20

Organizational support

y Where does DRP fit within the Su l Chain Mana ement?

y Do the KRAs include data integrity, and shipment data

integrity?

y Do KRAs include Forecast and market estimation/correction ?

y Are there incentives for such activities?

y Are individual and rou incentives in consonance with the

requirements of the DRP process?

Problem Solving

y Sales promotion

y Closing a warehouse

y Monitoring stock aging


13/14

3/8/20

Sales Promotion

Warehouse closure


14/14

3/8/20

Monitoring Stock Aging

y Use strict first-in first-out physical movement.

en y ose pro uc s a may e ea ng or a pro em e ore s

too late. Build in exception messages to flag potential shelf life

problems.

y If demand is dropping forecast should be reduced. Available

inventory or in transit should cover a larger period of time. Maybe

shipped to another warehouse.

Documents

DRP_PGPM [Compatibility Mode]