How DRP Stability Rules Reduce Supplier Schedule Variability
- by Murali Krishna Karra, SAP Supply Chain Consultant, Deloitte Consulting LLP
- Abhijit Kadam, Manager, Deloitte LLP
- July 21, 2014
Reducing supplier schedule variability is critical to reducing total supply chain costs for the aftermarket service parts industry. Learn how distribution requirements planning (DRP) stability rules in SAP Service Parts Planning (SPP) can reduce schedule variability and optimize planning from order to delivery. Learn how to configure DRP stability rules.
Reading this article, you will learn:
- The impact of making frequent changes to supplier schedules in a specific time horizon for the service parts industry
- How DRP stability rules can be configured to make optimal schedule changes without having an impact on service to the customer
- The concept of DRP stability rules through a real-life example
Supply chain schedule stability is critical to keeping costs down, but the ability to change supplier schedules, as part of a rapid response to changing conditions, can be equally important. Distribution requirements planning (DRP) stability rules determine DRP’s responsiveness to changing requirements. These rules ensure that schedule changes are made only within certain predefined parameters, thereby maintaining optimal supply chain performance.
Supplier schedule variability is one of the major challenging factors to supply chain optimization. Minimizing that variability can be exceptionally difficult, and some factors, such as weather or volume of traffic during transportation within your supply chain, can’t be controlled. However, you can avoid other factors to improve the efficiency of the supply chain.
One such factor is the frequency of schedule changes communicated to the supplier. Frequent schedule changes result in additional supply chain costs and lower efficiency. These changes also can affect the relationship between the supply chain partners.
Distribution requirements planning (DRP), part of SAP Service Parts Planning (SPP), is a time-phased requirements planning system that centrally procures material for the distribution network. DRP includes stability rules to reduce schedule variability to suppliers by requiring that a series of thresholds pertaining to shortage or excess be exceeded before DRP can make any schedule changes.
We explain the concept of DRP stability rules based on our understanding of implementing this functionality and explore how DRP stability rules are used by supply chain analysts to effectively reduce the schedule variability to the suppliers.
Would you like to see this full item?