Interpreting and applying demand driven MRP: a case study

Ihme, M., 2015. Interpreting and applying demand driven MRP: a case study. DBA, Nottingham Trent University.

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Abstract

Purpose – The purpose of this research is to evaluate Demand Driven Material Requirements Planning (DDMRP) in the context of improving the performance of a printing ink manufacturing company. The main issues the company is facing include poor due-date performance, stock levels not corresponding to the actual market needs and overall system instability leading to inefficiencies. The research evaluates the assumption underpinning Material Requirements Planning (MRP) and the Theory of Constraints (TOC) before considering their integration to meet the requirements of this company, with particular reference to a recent development entitled DDMRP. Design/methodology/approach – Case research was used to establish the underlying issues through semi-structured interviews, observation, Enterprise Resource Planning (ERP) data and questionnaires. This analysis was then compared with the assumption underpinning generic TOC solutions before conducting a simulated evaluation to compare past ERP decision making with DDMRP. Findings – DDMRP is shown to embody the concepts of buffer aggregation and buffer management within the context of dependent demand planning, effectively integrating MRP and TOC. The underlying production planning and control issues of the company were found to be consistent with the literature associated with the limitations of MRP and a good fit for the core issues traditionally addressed through TOC applications such as Drum Buffer Rope (DBR). The integration of this aggregated buffer management approach with MRP dependent demand within DDMRP provided further enhancements applicable to the company. This evaluation involved simulation, which shows the merits of DDMRP in the area of standardization of production-relevant decision-making and stock adjustment towards improving availability shown by roughly 45% reduction of high and low inventory alerts and a 95% reduction of stock outs over the period in focus. However, it is acknowledged that the improved simulated performance was not fully attributable to the adoption of DDMRP concepts. Research limitations/implications – The document uses a selection of relevant pieces of the literature from the areas of MRP/ERP, continuous improvement and DDMRP that have the potential to be supportive for assessing DDMRP as a performance improving methodology. However, since the amount of literature available on DDMRP is very limited, a comparison of the results with others’ findings is not possible. Furthermore, the primary data used originates from one specific company only. The resulting case study approach is therefore limited to a single case, which might limit the generalizability of the findings to an extent. However, since many companies are suffering from MRP shortcomings and TOC ideas like buffer management or dynamic buffers have been proven to deliver promising results in many applications, at least an assumption of a certain degree of generalizability could be justified. Further research needs to verify if the findings are replicable in comparable scenarios. Originality/value – DDMRP is a new commercial development that has not previously been the subject of a research study. The value of this research is in evaluating the key features of this planning and control system using real company data. By doing this, it is one of the first published projects in this area.

Item Type: Thesis
Creators: Ihme, M.
Date: July 2015
Rights: This work is the intellectual property of the author. You may copy up to 5% of this work for private study, or personal, non-commercial research. Any re-use of the information contained within this document should be fully referenced, quoting the author, title, university, degree level and pagination. Queries or requests for any other use, or if a more substantial copy is required, should be directed to the owner of the Intellectual Property Rights.
Divisions: Schools > Nottingham Business School
Depositing User: Jonathan Gallacher
Date Added: 27 Apr 2016 15:24
Last Modified: 20 Jul 2017 03:00
URI: http://irep.ntu.ac.uk/id/eprint/27704

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