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Demand Driven MRP - Revolutionary approach to planning


#1

DDMRP or Demand Driven Material Requirements Planning is a formal multi-echelon planning and execution method to protect and promote the flow of relevant information through the establishment and management of strategically placed decoupling point stock buffers.

This new method is challenging decades old methods that are embedded in established ERP like SAP, Oracle etc

Developing a solution based on specification released by Demand Driven Institute is an opportunity for ERPNext commnunity.

More so because Odoo already has something on these lines.
https://eficent.io/

We can help with understanding the business part of the opportunity.


#2

It would be helpful if you could point out what is missing in ERPNext to what is expected in this type of planning approach


#3

Hi Pavan

I am not an expert on ERPNext.

Basic difference is for Make to Stock scenario - traditional approach is to take forecast as an input. DDMRP uses forecasts to impact the buffer design but the actual production orders and supply orders are generated based on actual consumption in the market.

Demand Driven Institute site has lot of whitepapers to explain the nuances.

Hope this helps.


#4

The idea makes sense. But turning it into actual action points is where the value lies. Maybe actually look into what ERPNext offers, then do a gap analysis and present that. Otherwise this is going to go nowhere.


#5

I guess it would have to be two ways. Those who are experts on ERPNext share their experiences on the challenges faced by clients when what is offered by ERPNext is getting implemented.

I have narrated the generic challenges with other ERPs.


#6

@deepaknagar
it is a very big subject in itself, something similar is ‘Theory of Constraints’ by Eliyahu M. Goldratt. The author is a legend for some prominent teachers and industry leaders.
I would recommend reading https://www.goodreads.com/book/show/358415.Necessary_But_Not_Sufficient , this clears a lot air, and is interesting and relatable.

Based on my reading, here are some points for ERPNext :

  • Have a more cable planning tool that prepares schedules for workstations on demand
  • The demand driven approach is about re-running the Planning tool, which can again schedule as per the changed demands.
  • It is also about controlling excess capacity and not overproducing from workstations. Overproducing leads to locking up of working capital.

I am not sure if ERPNext users who could be SMEs will be able to benefit from this approach. To me it seems suitable for large scale manufacturing/service industries.


#7

Hi Dhananjay

Check out the case studies on Demand Driven Institute site.

There are success stories of large, medium and small sized companies.


#8

I will go through the case studies. They seem very relevant.
I think ERPNext has the basic system in place, we might need some reports to begin with.

e.g Base on the British Telecom case study(https://vimeo.com/218661511) :
“Purchase Order Items to be Delivered” - report should have a column indicating average daily consumption, based on which Purchase Orders could be categorized and color coded.

If you can help and come up with such examples, you can then either post it here or create a github issue.


#9

Hi Dhananjay

We are implementing such system for Bullows Paints Equipments, a user of ERPNext. We are using existing reports from ERPNext and have developed the solution on Excel.

One of the days if you visit the client site at Thane, we can demonstrate the same to you.


#10

Could you share the excel template and create a github issue on that basis ?


#11

How do I do that?

Sorry a basic doubt. I just created by id on Github.


#12

If you are logged in to github just follow this link https://github.com/frappe/erpnext/issues/new
You can set a title like [Feature Request] Demand Driven MRP report-

Then describe the following:

  • Why is it needed ?
  • How will it benefit your particular case ?
  • What needs to be done ? State it clearly. Here you put a screenshot of your excel file and describe the columns.
    Also your can refer to the existing reports like Recommended Re-Order Level and Stock Projected Qty, etc, as it seems your report is a combination of these reports.

There is a good first timers guide here : https://github.com/frappe/erpnext/wiki/Issue-Guidelines


#13

Check out the videos uploaded on YouTube:

https://www.youtube.com/channel/UC-E7DjI3Z3juixzPPvl2xSg/videos

Total of 30 Minutes in 6 videos