The modern supply chain faces unprecedented challenges: increasing volatility, unpredictable fluctuations in supply and demand, and ever more complex global networks. In this dynamic environment, traditional planning methods such as Material Requirements Planning (MRP) are reaching their limits.
A new article by Carol Ptak and Chad Smith, published in the Journal of Supply Chain Management, Logistics and Procurement (Winter 2024–25), explores this issue and demonstrates how Demand Driven Material Requirements Planning (DDMRP) helps companies make their planning processes more resilient and efficient.
Read the full article here: Fixing Planning in the VUCA World
Key Takeaways from the Article
MRP, which has been the standard for production and inventory planning since the 1960s, is based on the assumption that all relevant data—such as demand, inventory levels, and lead times—are precise and stable at the time of planning. However, in today’s VUCA world (Volatility, Uncertainty, Complexity, Ambiguity), these assumptions often no longer hold true.
The Solution? A Paradigm Shift in Planning
DDMRP introduces “Decoupling Points”—strategic inventory buffers that reduce dependencies within the supply chain. This enables companies to:
✔ React faster to changes
✔ Minimize the Bullwhip Effect
✔ Prevent stockouts and excess inventory
By incorporating these concepts, organizations can shift from reactive firefighting to proactive, demand-driven planning.
Leading Industry Players are Adopting DDMRP
It’s no surprise that SAP and Microsoft have integrated DDMRP into their supply chain management solutions. These industry giants recognize that traditional planning models no longer suffice in today’s rapidly changing environment.
✔ SAP’s Integrated Business Planning (SAP IBP) includes DDMRP capabilities, helping companies achieve better inventory control and supply chain responsiveness.
✔ Microsoft’s Dynamics 365 Supply Chain Management leverages DDMRP principles to enhance visibility, reduce variability, and improve decision-making.
The fact that two of the world’s largest software providers have embedded DDMRP in their solutions underscores its significance—and its effectiveness in modern supply chain planning.
From Theory to Practice – Become a Demand Driven Expert!
Want to understand how DDMRP works in practice and how to future-proof your supply chain? Our hands-on online training courses will provide you with the skills to implement this game-changing methodology.
- Demand Driven Planner (DDP) – June 23–24, 2025 Register here
Learn the fundamentals of DDMRP and discover how to optimize inventory, shorten lead times, and improve your responsiveness to market fluctuations. - Demand Driven Leader (DDL) – May 22-23, 2025 Register here
Understand how leaders can integrate DDMRP into their strategic planning and position their organization for an agile and resilient future.
Sign Up Now and Shape the Future of Planning! Don’t miss the opportunity to gain insights from industry experts and transform your supply chain with DDMRP.
