Transportation case part 4 Distribution resource planning (DRP) Roberto Pinto CELS Dept. of Engineering University of Bergamo Distribution resource planning DRP is a management process that determines the needs of inventory stocking locations (i.e. CDC, stores, warehouses ) It ensures that supply sources will be able to meet the demand, by comparing the required and available resources It recommends what actions must be taken to expedite or delay purchases and/or production, thereby synchronizing supply and demand 2 1
Distribution resource planning Sales forecast Customer orders Inventory levels+ safety stock policies Which product is needed When? How much? Where? Outstanding purchases Lead times Transportation modes Constraints (i.e. min lots) DRP Transportation capacity Space, manpower Production / purchasing levels 3 DRP logic Similar to MRP logic It time-phases future activities, predicting possible outcomes, and recommending actions 4 2
LT = 2 w LT = 1 w LT = 2 w Safety stock 200 Order qty 300 Milan Safety stock 75 Order qty 150 Rome Safety stock 100 Order qty 300 Palermo Adapted from Martin, 1997 5 500 6 3
Project stock - = - = 500 400 280 190 80-40 -140-220 -340 7 Identify critical points and define replenishments 500 400 280 190 80-40 -140-220 -340 8 4
Identify critical points and define replenishments 500 400 280 190 80-40 -140-220 -340 300 9 - = 500 400 280 490 380 260 160 80-40 + 300 10 5
500 400 280 490 380 260 460 380 260 300 300 11 500 400 280 490 380 260 460 380 260 300 300 300 300 12 6
The same process is executed for the other customers A summary of planned shipments is therefore defined 13 Forecast 40 50 45 50 40 45 40 50 150 160 Rome customer 14 7
Forecast 40 50 45 50 40 45 40 50 150 160 120 220 175 125 85 40 0-50 Rome customer 15 Forecast 40 50 45 50 40 45 40 50 150 160 120 220 175 125 85 190 150 100 150 Rome customer 16 8
Forecast 40 50 45 50 40 45 40 50 150 160 120 220 175 125 85 190 150 100 150 150 Rome customer 17 Forecast 120 130 115 125 140 110 125 105 300 180 350 235 110 270 160 335 230 300 300 300 Palermo customer 18 9
Forecast 120 130 115 125 140 110 125 105 300 180 350 235 110 270 160 335 230 300 300 300 300 300 300 Palermo customer 19 : summary of transportation requir. Milan 0 300 0 0 300 0 0 0 0 Rome 0 0 0 0 0 150 0 0 0 Palermo 300 0 0 300 0 300 0 0 0 Transport capacity 300 300 0 300 300 450 0 0 0 20 10
References Martin, A.J. (1995). Distribution Resource Planning, The gateway to true quick response and continual replenishment, Wiley Cavalieri, S., Pinto, R. (2007), Orientareal successo la supply chain, ISEDI 21 Credits CELS University of Bergamo Roberto Pinto Ph.D Logistics and Supply Chain Specialist http://cels.unibg.it roberto.pinto@unibg.it 22 11