Is Demand Driven Material Requirements Planning the blueprint for the future and revitalization of formal planning in the 21st Century? Some people think so as Carol Ptak and Chad Smith were asked to co-author the new Orlicky’s Material Requirements Planning 3/E. But more impressive are the full houses of practitioners that Carol and Chad are talking too. The one simple reason for that is they understand the problem.
Carol and Chad were on previous podcasts with me, In a Supply Chain, Where is more important than How Much! and Can MRP be a Demand – Driven Tool?. These podcasts were my most quoted ones this past year. For example, Carol Ptak said in her podcast:
A lot of people have focused on the fact that the Economic times right now are really bad. What a lot of people are missing is the fact that the world around us has fundamentally changed.
A we see now across the world is that we have excess capacity when you add to that the Internet where we get on the Internet we expect to have an experience like Amazon, or order it is going to tell me instantly when I’m going to get it. If you don’t provide it at the price I want to pay and the time I want to pay then I can just go someplace else. Why can I do that? That’s because I have all this excess capacity out there.
So what companies are seeing today is volatility like they never had to manage before and at the same time they no longer have the reliability of understanding what the customers are going to demand and when they’re going to demand, because customers are increasingly fickle.
So what we’ve got is the perfect storm that has come together of excess capacity and incredible product variety.
The two of them did not disappoint me. These two people have rewritten the book on MRP, literally. If you don’t think MRP or even your Lean Supply Chain people could not learn from this podcast, think again.
Carol has written several books on MRP, ERP, Lean and Theory of Constraints. She is the Past President of APICS International and former Vice President and global industry executive for manufacturing and distribution industries at PeopleSoft. Chad co-founded Constraints Management Group in 1997 after working under the tutelage of Dr. Eli Goldratt for several years. Constraints Management Group specializes in demand driven supply chain and manufacturing solutions for a variety of industries. Clients have included Boeing, Unilever, IBM, LeTourneau Technologies and Roseburg Forest Products.
What is Demand Driven Material Requirements Planning (DDMRP)?
Demand Driven Material Requirements Planning is an innovative multi-echelon pull methodology to plan inventories and materials. It enables a company to build more closely to actual market requirements and promotes better and quicker decisions and actions at the planning and execution level.
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