Distribution Requirements Planning
Concept and analysis of DRP|
DRP system became famous in the 1970s, because companies started to notice the need for a strong system to help in resource replenishment to be able to fulfill customers demand in a timely manner. DRP refers to distribution requirements planning, in which you plan the best product for your customers, its quantity, location, and time required to be present, in order to meet you’re anticipated demand correctly. It refers to the seven R’s of logistics theory: the right product, the right customer, the right time, the right place, the right condition, in the right quantity, at the right cost. In DRP those 7R’s can be achieved perfectly if DRP system is managed correctly and in the right manner. It is a computerized system that allows companies to plan inventory and make them available when needed upon customers’ needs. (DRP is driven by the customer’s demand for the finished goods). If it is a manufacturing or a retail company, they both would need a perfect DRP system to be able to reach the forecasted level of demand needed and also to forecast future levels of demand. In a manufacturing company the DRP system would cooperate with a system called MRP (manufacturing resource planning) and take the entire inventory information that are obtained from the DRP then use them to plan manufacturing dates and quantities and also to know the amounts of input to buy. An advantage of DRP is that it helps the MRP system do its work effectively by having the DRP system be as the outside eyes of entry to the MRP to help it better plan manufacturing of finished goods and not have over or underproduction levels which will incur extremely great costs of occurred and cause a bullwhip effect. It also refers to the management and planning of inventory and materials flow from the manufacturer to retailer to customer with the use of effective warehousing...