With DBA you can keep your inventory lean with demand driven job and purchase order generation and dynamically calculated reorder points and minimum order quantities.
Boost efficiency with lean inventory
Over-stocking ties up working capital, requires storage space, is vulnerable to wastage from obsolescence, and reduces return on inventory investment.
In contrast, lean inventory frees up working capital, requires less storage space, reduces wastage from obsolescence, increases inventory turnover, and improves return on inventory investment.
Reduce inventory with demand driven job and purchase order generation
DBA’s Demand Driven MRP is a planning system that only generates jobs and purchase orders in response to firm order ship dates.
This reduces inventory because stock replenishment is only triggered by actual demand.
By contrast, older forecast driven and BOM explosion planning methods create jobs and POs in anticipation of potential demand scenarios, which requires more inventory on hand that might not be used.
Dynamic reorder points trigger supply when needed
In DBA, a job or purchase order for stock replenishment only gets triggered whenever total net demand falls below the item’s reorder point.
The reorder point is dynamically calculated from an average monthly demand amount and/or a safety factor applied to the item’s replenishment time.
Dynamic minimum order quantities determine job or purchase order frequency
When a job or purchase order gets triggered, the item’s minimum order quantity determines the job or purchase order quantity.
The minimum order quantity is dynamically calculated from planned supply days, which applies the desired interval between jobs and POs to the item’s replenishment time. Lean inventory is achieved by using smaller supply intervals for smaller and more frequent jobs and purchase orders.
Generate demand driven purchase orders for long lead time items
DBA makes it easy to plan purchase orders for items with extremely long lead times.
By combining a dynamic reorder point based on anticipated monthly demand with a planned supply days interval, purchase orders get triggered at regular intervals whenever actual net demand drops below the reorder point.
This results in a steady pipeline of staggered POs, which smooths out supply to prevent overstocking and minimizes the duration of any shortages.
Take your efficiency to a new level
Keeping inventory lean is an essential element in boosting the overall efficiency of your manufacturing system. If you’ve hit the efficiency wall with your existing planning methods, replace them with Time to Shipment MRP and take your company to a new level of efficiency for the Amazon age.