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Author's profile photo Ruthvik Chowdary

Demand-Driven MRP – Part I: Over View

Dear All,

 

Demand-Driven MRP in Short (DD MRP) has been introduced into SAP S/4 HANA with its 1709 Release. and there is a lot of Buzz regarding DD MRP, so I have decided to Share knowledge based on my understanding and experience.

Will plan this in 2 parts one with DD MRP overview and second with how to use DD MRP Tool

let’s jump into the topic

What is DD MRP

  • DD MRP is Not an SAP Product its Delivered by Demand Driven Institute
  • Its therein Market in from 10 years
  • It’s a tool which reduces shortages and overloads
  • Its secret is maintaining of Buffers

People are in assumption that DD MRP improves Forecasting but it’s a tool which works against Forecasting

Because 70~80 % can be only achieved and even in some cases it’s 40~60%

Key Points about DD MRP

  • It’s Available in SAP From 1709
  • DD MRP works on Buffer level Stock.
  • It captures Spikes in Demand
  • It’s only for selected Materials (high variability)
  • Stock-outs & overstock will be controlled
  • It supports MTS, MTO & ATO
  • It’s a Combination of Pull & Push
  • It’s not order based planning
  • It’s not an auto driven tool requires manual interventions.
  • It requires a lot of calculations and trails.
  • At the moment it won’t support Fashion, Retail, VC Model

 

Variability in Supply Chain causes our forecast failure

 

when you see the Forecast accuracy at Finished goods Level it’s around 70 ~80 % but when Low-level Materials are used in multiple BOM’s then the accuracy of low-level forecast becomes 200 ~ 300 % inaccurate

MRP Type VB vs PD

Below are the Key parameters

Key Parameters

  • Identification of material
  • Maintaining Buffers
  • Adoption of Sudden Spikes
  • Manual Interventions
  • Visible and Collaborative Execution

Identification of materials: –

Tools -> Material Classification

the material gets classified based on below points

  • Lead time
  • Bom usage
  • Value $
  • Variability

Manual Interventions

Year End Sales / Peak Seasons of sales

Special Promotions

Visible and Collaborative Execution

Tools to Monitor buffers

Reports

 

Decuple Lead Time

Which Materials are planned in DD MRP Lead time won’t be calculated

 

Above are the Key Points which we need to understand before we go further.

the rest of the Tools usage and how to Activate DD MRP will see in next Part.

Please share, Like and Comment anything else you want to share or add points.

Thanks & Regards

Ruthvik Chowdary

SME – S/4 HANA Manufacturing & Procurement

SAP Ariba P2P

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      13 Comments
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      Author's profile photo L V K Janardan Vaitla
      L V K Janardan Vaitla

      Hi Ruthvik,

       

      It's really very knowledgeable. looking forward to the next post

      Author's profile photo Muhamed Ibrahem
      Muhamed Ibrahem

      Hi

      Good blog.. very informative

      Regards

      Author's profile photo Ruthvik Chowdary Vennamaneni
      Ruthvik Chowdary Vennamaneni
      Blog Post Author

      Thank you Muhamed Ibrahem

      Author's profile photo Sai Krishna Vallurupalli
      Sai Krishna Vallurupalli

      Very good information

      Author's profile photo Saiteja Joginapally
      Saiteja Joginapally

      Hi Ruthvik,

      Did you write that second blog you mentioned? If yes, could you please guide me to that link?

      Thanks

      Sai Teja

       

      Author's profile photo Ruthvik Chowdary Vennamaneni
      Ruthvik Chowdary Vennamaneni
      Blog Post Author

      Hello Sai Teja,

       

      Not yet written I was fully occupied in other activities, once written will share the same

      Author's profile photo Walter Poe
      Walter Poe

      Hi Ruthvik/Experts,

       

      Can you please confirm for me when you say, " won’t support Fashion, Retail, VC Model"   I am assuming that means the master data models of those entities?  Also;  Is there any changes as of 1809 and will this work with articles and plants?

       

      thank you

      Walter

       

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      At the moment still in 1909 also DDMRP Won't support Fashion, Retail, VC Model related Business.

      Author's profile photo Walter Poe
      Walter Poe

      Hi Ruthvik,

       

      Thank you for your quick response.  Can you elaborate more on what this means please?  How does this affect the Material FERT to Article Master?  Can I create a Article Master  and have it act like a FERT in the SYSTEM along with DDMRP.  Again thanks for your guidance  🙂

       

      thanks

       

      Walter

      Author's profile photo MURALIDHARA H.N
      MURALIDHARA H.N

      Good luck and best wishes 🙂

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      Thank you, Sir ?

      Author's profile photo venu gopal
      venu gopal

      Hello Ruthvik,

      Thanks for this blog..

      Author's profile photo Ruthvik Chowdary
      Ruthvik Chowdary
      Blog Post Author

      Thank you Venu Gopal