Demand-Driven MRP – Part I: Over View
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
- 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 $
Year End Sales / Peak Seasons of sales
Visible and Collaborative Execution
Tools to Monitor buffers
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
SME – S/4 HANA Manufacturing & Procurement
SAP Ariba P2P
It's really very knowledgeable. looking forward to the next post
Good blog.. very informative
Thank you Muhamed Ibrahem
Very good information
Did you write that second blog you mentioned? If yes, could you please guide me to that link?
Hello Sai Teja,
Not yet written I was fully occupied in other activities, once written will share the same
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?
At the moment still in 1909 also DDMRP Won't support Fashion, Retail, VC Model related Business.
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 🙂
Good luck and best wishes 🙂
Thank you, Sir ?
Thanks for this blog..
Thank you Venu Gopal
Hai Mr. Ruthvik,
Its really useful and rarely available info you that you have shared. Thanks a lot!!!!
It will be helpful if you could able to clarify my doubts. I have an requirement to use DDMRP in an project, I understood from your video that the series of operations to be carried out in SAP like Schedule product classification, mass maintenance of products, schedule lead time classification etc.
But my question is, If we need to use it in a new SAP Implementation project, what are all the prerequisites or data needed.
If we don't have past history or data it possible to run those apps with the data we have newly created and executed.