Just like a good old MPS, buffers must be realistic and aligned with your demonstrated capacity. In this case, you have missed an essential element: Matching your buffers to capacity. If you keep your buffers unchanged and run according to the recommendations, you will generate many orders beyond capacity, you will clog up the shop, and drown in priorities. You don’t have enough capacity, so you can’t replenish all your items at the top of the nominal buffers. ![]() It is necessary, but it is not sufficient. And, if the performance is not there but we followed the recommendations, it means that the model is not well sized.įollowing the discipline is a prerequisite. If the buffers are well sized and adapted over time, yes, the performance should improve. Not necessarily - it just reflects our operating discipline. Is this a guarantee of results? Will stock-outs decrease and stock turns increase? So, when we have more green, it means we are following the recommendations. When the flow equation goes below the top of yellow, we go back up to the top of green, so at the end of each day we have a maximum of green items, if we have placed the recommended orders. When we analyze the net flow equation over time, if we have more and more items in green status, it means that we are following the replenishment discipline. There are two main measures for a DDMRP inventory model: the net flow equation (used to generate orders), and the inventory itself. Your teams need to understand what these color codes mean, what conclusions to draw, and what actions to take. ![]() So the goal is going to be, over time, to have more green, and certainly less blue and dark red. In a Demand Driven model, we monitor the health of flows and inventories using these color codes. Maybe also some dark red and blue, which is not so good. If you’ve every looked into the Demand Driven model, you’ve probably seen charts with red, yellow, and green.
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