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DDMRP  Case  Studies  from    the  Demand  Driven  Ins7tute  

All  material  and  content  ©  copyright  2014  Demand  Driven  Ins7tute.    All  rights  reserved.  Cer7fied  Demand  Driven  Planner  (CDDP)  is  a  trademark  of  the  ISCEA  

2 All  material  and  content  ©  copyright  2012  Demand  Driven  Ins7tute.    All  rights  reserved.  Cer7fied  Demand  Driven  Planner  (CDDP)  is  a  trademark  of  the  ISCEA  

Oregon  Freeze  Dry  Case  Study  

Mountain  House  Division:  •  Sales  increased  20%  •  Customer  Fill  Rate  improved  from  79%  to  99.6%  

•  60%  reduc*on  in    inventory  

Industrial  Ingredient  Division:  •  60%  reduc7on  in  make  to  order  lead  7me  

•  100%  On-­‐Time-­‐Delivery  •  20%  reduc7on  in  inventory  

Raw Material No out of stock

Reduced inventory $2.5M+

3 All  material  and  content  ©  copyright  2013  Demand  Driven  Ins7tute.    All  rights  reserved.  Cer7fied  Demand  Driven  Planner  (CDDP)  is  a  trademark  of  the  ISCEA  

4 All  material  and  content  ©  copyright  2012  Demand  Driven  Ins7tute.    All  rights  reserved.  Cer7fied  Demand  Driven  Planner  (CDDP)  is  a  trademark  of  the  ISCEA  

LeTourneau  Case  Study  

MRP

DDMRP

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C

Steel Products

Component Supply (H/

L)

Offshore Products

Mining Products

C

C

Suppliers

Drilling Systems

Forestry Products

C

C

Synchroniza7on  and  Flow  Challenge  

C = Customer = Remote Location

Supply Variability

Distortions & amplification in

demand requirements reverberate backward

Demand / Information Variability

End Item Assembly inherits the amplifying upstream variability.

Lead Time before DDMRP

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SP CS

OP

MP

C

C

Suppliers

C = Customer

DS

FP

C

C

= Remote Location

= Time Buffer = Strategic Replenishment Buffers

C

DDMRP  Design  

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Stock-­‐outs  reduced  by  over  66%!  

0

100

200

300

400

500

600

700

Dec '01 Dec '02 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 Dec '08 Sep'09A

$Millions

Longview Inv Longview TR

0

100

200

300

400

500

600

700

Dec '01 Dec '02 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 Dec '08 Sep

$Millions

Houston Inv Houston TR

High Inventories Shortages Massive Expedites

Low Inventories High Service Fewer Expedites

DDMRP  (Longview)  vs.  MRP  (Houston)  

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Before  Demand  Driven  –  FMCG  Example  (soap)  

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Raw

Pack

Mix Room

Pack 1

Pack 2

Pack 3

DC

DC

DC

DC 50+ Days

Planned Orders (MRP) Purchase Orders

Manufacturing Orders

Expedites/ Schedule Break-ins

Before  Demand  Driven  –  FMCG  Example  (soap)  

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DDMRP  Design  –  FMCG  Example  (soap)  

All  material  and  content  ©  copyright  2013  Demand  Driven  Ins7tute.    All  rights  reserved.  Cer7fied  Demand  Driven  Planner  (CDDP)  is  a  trademark  of  the  ISCEA  

Raw

Pack

Mix Room

Pack 1

Pack 2

Pack 3

DC

DC

DC

DC 9 Days

HUB

3-8 Days

Manufacturing Orders Stock Transfer Orders

Purchase Orders

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Immediate  Results  for  Materials  –  FMCG  (soap)  

300  Materials  are  buffered  without  increase  in  RPW  inventory.    This  is  accomplished  with  18%  less  total  

RPW.  

Dampened  the  bull  whip,  now  opera*ng  more  effec*vely,  with  less  

working  capital  

Before

After Replenishment lead time has been reduced 82% to 9 days from 50 days,

becoming Responsive

Finished Goods dropped 45+% with consistent services level at

or above 99.7%