Why Choose A Demand Driven MRP Approach?
By: Scott Johnny
Tags: Supply Chain, Demand Driven Mrp

A demand driven MRP is a global approach to managing manufacturing inventory, product demand and associated information across an enterprise. One of its components is the Demand Driven Requirements Planning (DDCRP). This component focuses on providing manufacturers with a framework within which to assess and plan for changes in supply. Crucial to any discussion about the subject of MRP is the notion that it is based on the concept of a global market. In a demand driven MRP, a company will use the resources available to them to determine their most efficient processes for meeting their customer’s needs.

The supply chain is an essential component of any demand driven MRP. One of the elements of this type of MRP is the demand-driven requirements planning (DDCRP). This framework identifies the resources that a company must spend on inventory management. This includes factors such as the type of merchandise to be manufactured, the amount of the inventory to be managed, and the locations of the manufacturing locations. Within the scope of this article, three components are considered critical to any demand driven MRP: inventory management, forecasting, and buffer capacity. Each element of inventory management and forecasting is important in determining the appropriate mix of activities necessary to support the manufacturing process.

Inventory management is a critical factor in any demand driven MRP. It requires the ability to forecast and manage demand within an accurate, timely, and effective manner. To accomplish this task, a company must first identify the sources of variability in order to effectively control the variation. Variability reduction is accomplished by creating or establishing a demand driven inventory buffer.

Proper demand-driven MRP planning requires the identification of both accurate, and, reliable information regarding existing and anticipated inventory levels. In addition, the plan also requires the establishment of a strong and robust MRP operational framework. This framework is typically composed of both internal and external sources of information that support the MRP strategy. One example of an external source of information that may be considered in this regard are pricing data.

One important factor that goes into demand driven MRP is the development of a robust MRP framework. The framework identifies the most suitable MRP operational methodologies. These methodologies are based upon both internal and external factors such as the location of a company’s manufacturing facility, its level of activity in any given time period, its relationship with suppliers, and its relationship with its customers. In short, the MRP planning framework attempts to create a demand-driven system by which all of these factors are considered and a decision is made as to which factors should be included in the MRP. This demand driven institute analysis can help a company determine its optimal MRP methodology.

Another factor that is taken into consideration by a strategic management office is the company’s relationship with its suppliers. The MRP process begins by establishing an