DDMRP & FORECASTING

- Forecasting is used to determine the buffer levels through ADU: Average Daily Usage which
stands for the throughput or demand use.
o Every product has its own ADU
o IBP DDMRP computes the ADU and its variability using past, future or a combined time
horizon
o To actually determine the ADU in the system we have to use either predefined forecast
error profile or the “Manage Forecast Error Calculations Inventory Optimization app” to
create our own forecast error calculation profile
o These values will get saved into key figures
- Now as you have written using the predefined forecast error calculation profile we can choose
either one of the below the get the ADU
o Using Actuals over Past 21 Days and Forecast over Future 21 Days
o ADU Calculation Using Actuals over Past 42 Days
o ADU Calculation using Future Forecast over 42 Days
o ADU CoV Calculation using Historical CoV of Actuals
- We can also create our own forecast error profile using the “Manage Forecast Error Calculation
Inventory Optimization” app. The values for ADU calculated by the app are then saved in Key
Figures which are then used by the DDMRP operators to suggest the decoupling points.
LINK - https://help.sap.com/viewer/feae3cea3cc549aaa9d9de7d363a83e6/1905/en-
US/bbbad34ca19e4c0ea0436106e37582db.html
- Now from a system perspective this is correct but the forecast is used primarily for setting the
buffer level. The main high level steps in DDMRP are:
o Data Flow from ECC to IBP: Done mostly using CPI-DS
o ADU Calculation in IBP: This is where past forecast comes into picture to provide the
buffer level
o Buffer Positioning and Buffer Zone Sizing: Here we set the de-coupling points and
calculate the buffer zones. There are 2 ways of doing this:
▪ Run the “Recommend Decoupling points (Solve)” operator in excel
▪ Manually set the decoupling points using DDMRP buffer analysis
o Replenishment Order Recommendation:
o Data Flow from IBP to ECC - This is for the pull replenishment order recommendation.
To be done using CPI-DS
o Run Demand-Driven Planning in the SAP ERP, supply chain integration add-on for IBP –
To generate orders using transaction /IBP/EDD_RUN_MRP. This converts the IBP order
recommendations into orders, such as planned orders and purchase requisitions. These
are considered pull-order within the decoupled lead time, and are for operational
action.
o Visible & Collaborative Execution - To monitor and view the results of the DDMRP
heuristic run

Now this may seem that DDMRP is using forecasting but DDMRP does not use forecasts as an indicator of the
demand as is prevalent in traditional MRP systems