■Background
I understand that, when using DDMRP, users need to define their own values for the Lead Time Category and Variability Category.
To optimize inventory levels, we would like to set appropriate values for the Lead Time Category and Variability Category. What criteria or methodology should be used to determine these values?
For context, we are considering using DDMRP for the procurement of purchased items, rather than for manufactured items.
■Question
When using DDMRP, how should the Lead Time Category and Variability Category be determined? Please advise based on best practices adopted by other companies.
Parameters in scope
Lead Time Category:
1.Red Lead Time Factor (%)
2.Green Lead Time Factor (%)
Variability Category:
3. Variability Factor (%)
To reiterate, as part of our ongoing DDMRP operations, I would like to review parameters 1, 2, and 3 periodically and maintain them at appropriate levels.
Could you please advise what criteria or methodology should be used to calculate the appropriate values for these three parameters?
After the initial parameter setup, during the operational phase, which metrics or values should we monitor in IFS to determine whether the inventory levels maintained through DDMRP are appropriate? Also, what logic or criteria should be used when adjusting the parameters?
We would appreciate it if you could share any real-world examples of how DDMRP has been operated and managed in practice.