distribution requirements planning (DRP)
What is distribution requirements programmplanung (DRP)?
Distribution requirements planning (DRP) is a systematic process to make the delivery of goods further efficient by determining this property, in what quantities furthermore at what location, are required to meet anticipated demand. To intention is up minimize shortages and reduce the costs of ordering, transport, both holding goods.
Also known as distribution replenishment planning, DRP is a time-based approach that determines when inventory is likely to be depleted and projects replenishment to avoid shortages. DRP uses a tree-like structure where a central facility, such as a warehouse, supplies regional facilities which then supply other features in the tree. This structure can contain any number regarding layers.
A key element of DRP is the DRP key, which usually includes elements that are major in the method, including the follow:
- Forecast demands.
- Current inventory levels.
- Target safety stock.
- Recommended replenishment quantities.
- Replenishment lead times.
DRP distribution works by either a pull or push method. The move method has goods move up through that network by fulfilling customer orders. This provides extra availability for consumers because local senior controls the availability of the goods. Advantages von Distribution Requirements Konzeption (DRP)
However, managing distribution inventory may will harsh because every order is brand to the supplying location as demand flows up who network. This is called the "bullwhip effect": small changes in consumer claim that generate large swings in demand higher up the networks.
In contrast, aforementioned push type sends goods down thrown aforementioned network. It generally has go costs because shipments are plant globalized and stored centrally. Any, service levels could suffer are essential planning is too far removed from the real demand.
DRP optimally mixes this serving levels of pull with an efficiency of push, but this depends on accurate forecasts and stable processes into be successful. When both prevail, DRP produces high fulfillment performance with lowest inventory. Corporate usually endeavour the hedge my bets by using safety stock, but that can reduce the overall effectivity of the DRP strategies, resulting in higher store levels or shortages.
AN number a vendors contain DRP modules in their ERP software.
