Introduction
Demand Driven Material Requirements Planning (DDMRP) is a supply chain planning methodology that mainly involves the decoupling of supply and demand. Decoupling involves setting up decoupling point items. Then, you would maintain buffers for these items that you can use to ensure that you have the right amount of stock. By maintaining these buffers, you'll avoid cascading fluctuations based on smaller fluctuations with your point items. The buffers are set up to cover the average use of a part, and you can adjust them to compensate for demand spikes. DDMRP is a strong planning methodology for companies that experience shorter customer tolerance times than their cumulative lead times for products. While DDMRP is mostly applicable to manufacturers that use multi-level bills of materials (BOMs), it can also provide value in distribution or retail spaces.