Distribution Resource Planning

Distribution resource planning is the key operational process in a make-to-stock Supply Chain

Positioning the right products at the right time and in the right place in a multi-level logistics network is crucial to inventory and service optimization, and requires an in-depth understanding of customer behavior at a local level as well as decision-making support tools to cascade requirements within the network.

The fundamental principle behind the Distribution Resource Planning (DRP) process involves gathering sales forecasts (including firm orders) and calculating the supply needs of the warehouses at every level of the network in order to match these forecasts.

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DRP factors in all constraints applicable to the Supply Chain (supply lead times, size of each logistics batch, stock levels, etc.).

DRP enables companies to send a demand signal to all production units, enabling them to develop their production plan and, through a “deployment run”, calculate the relevant stock transfer orders in the network.

How can Argon Consulting help you?

  • Identify challenges related to existing deficiencies and estimate the cost of overhauling the organizational structures and tools in place (business case)
  • Overhaul processes in line with best practices and the specific features of the company (products, customers) and in a manner that is consistent with its Supply Chain model
  • Clarify the target organizational structure in terms of skills, scaling, organization (central vs. local, by product line/factory, or by market), and roles and responsibilities
  • Integrate the distribution plan with all other processes (demand planning, S&OP, MPS, etc.) and in line with the company’s Supply Chain model
  • Establish optimal inventory settings (safety, anticipation, or turnover stock), while attempting to differentiate the management methods by product family, customer type, and period (dynamic management)
  • Develop rules to optimize transportation constraints and costs
  • Implement alerts, KPIs, and scorecards
  • Select and implement tools with which to calculate replenishment requirements and optimize deployment (specifications drafting, management of calls for tender, deployment strategy, implementation assistance, project management and risk management, etc.)
  • Deploying an improvement plan (training, fine-tuning of models, etc.) and managing change (in culture, behavior, skills, communication, etc.)

Case Studies

Adapt the purchasing and supply chain organization to support strong international growth
From the supply chain vision to the deployment of processes and the implementation of a supply chain planning information system
Optimization of a leading petrochemical company’s MRO supply chain
Development of a program to reduce stocks and cut logistics costs
Deployment of Supply Chain processes, teams and information system
Boost performance by cutting stocks and improving the service rate by overhauling the processes and deploying supply chain planning tools
How we helped a leading European consumer goods supplier to build and deploy a flow management and supply chain planning target vision
Development of a stock reduction program
Transformation projects in the aeronautics sector: critical for supporting sector growth
Drivers for reducing inventory and increasing flexibility in the pharmaceutical industry