What are the benefits of demand-driven MRP?

Ulrich Wetterauer: Demand-driven MRP is primarily about managing the variability and complexity in today's global supply chains. And that leads to improvements that are tantamount to a quantum leap.

What does that mean in concrete terms?

Wetterauer: Companies that already use DDMRP have been able to reduce their inventory by an average of 31 percent (across all industries) and significantly reduce expenses for material handling, storage costs and depreciation.

In addition, significant improvements in service levels led to competitive advantages and increased sales. DDMRP balances out fluctuations in demand and thus stabilizes production.

As a result, capital-intensive production and storage capacity that is no longer needed can be freed up, overall plant efficiency increases and production costs fall.

These are results that are unimaginable with traditional approaches.

Wetterauer: Exactly. This is demonstrated both by actual customer projects and the extensive simulations we have conducted based on representative supply chains.

Traditional, purely forecast-based supply chain planning approaches can definitely no longer keep up. The future belongs to demand-driven supply chain management and the companies that consistently implement this innovation.