Friday

Distribution Requirements Planning

Definitions

DRP “…for tying the physical distribution system to the manufacturing planning and control (MPC) system.”

A set of techniques that can improve the linkages of the demand from the marketplace and manufacturing ability.

Advantages of DRP
DRP connects current inventory and forecasts of field demand to manufacturing’s MPS and MRP.
DRP can anticipate future requirements in the field.
Match material supply to demand, match inventory to customer service requirements.
Increase the speed the firm can react to the marketplace
Provide savings by better aggregation of transportation and dispatching.

The Basics
Basic idea: Time-phased order planning (TPOP)
Independent at field location, based on inventory level
Basic objective: Build a period-by-period plan for distribution of goods that provides the minimum inventory required to meet demand and satisfy safety stocks
Required SKU-level data for DRP:
Current balance on hand (BOH)
Target safety stock
Recommended lot size
Replenishment lead time
Forecasts of demand by period

Using DRP
Consolidating demand and supply information
Using the tables for distribution
Distribution center operations
Transportation load planning
Using the tables for plant activities
Shipping schedules
Production planning

The Value of DRP
“Perhaps DRP’s greatest payoff … is from integrating records and information” (Vollman et al.: p. 756)
DRP summarizes and integrates demand information “from the field” to coordinate distribution and production decisions
In comparison to (s,Q) inventory system
Use (s,Q) if only objective is to minimize inventory level of a specific item at a specific location
Specific advantages of DRP over (s,Q)
DRP not restricted by stable demand assumption
DRP shows planned shipments and thereby allows for planned coordination
DRP allows integration of demand from all sources (e.g, forecasts plus actual orders plus service parts demand)
Note that DRP “approaches” (s,Q) with stable demand and small time buckets

1 comment:

partha giri said...

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