Case Studies from the Demand Driven Institute

1. 1 DDMRP Case Studies from the Demand Driven Institute All material and content © copyright 2014 Demand Driven Institute. All rights reserved. Certified Demand Driven Planner (CDDP) is a trademark of the ISCEA

2. 2 Oregon Freeze Dry Case Study Mountain House Division: • Sales increased 20% • Customer Fill Rate improved from 79% to All material and content © copyright 2012 Demand Driven Institute. All rights reserved. Certified Demand Driven Planner (CDDP) is a trademark of the ISCEA 99.6% • 60% reduction in inventory Industrial Ingredient Division: • 60% reduction in make to order lead time • 100% On-Time-Delivery • 20% reduction in inventory Raw Material No out of stock Reduced inventory $2.5M+

5. Forestry Products Mining Products 5 C C Distortions & amplification in demand requirements reverberate backward Steel Products Component Supply (H/L) Offshore Products C Suppliers Supply Variability C Drilling Systems C Synchronization and Flow Challenge C = Customer = Remote Location Demand / Information Variability End Item Assembly inherits the amplifying upstream variability. Lead Time before DDMRP

6. 6 = Strategic Replenishment Buffers Suppliers = Time Buffer SP CS FP MP OP C C C C = Customer DS C = Remote Location C DDMRP Design

7. DDMRP (Longview) vs. MRP (Houston) High Inventories Shortages Massive Expedites 7 700 700 Stock-600 outs reduced by over 66%! 500 400 300 200 100 0 Dec '01 Dec '02 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 Dec '08 Sep '09A $Millions Longview Inv Longview TR 600 500 400 300 200 100 0 Dec '01 Dec '02 Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 Dec '08 Sep $Millions Houston Inv Houston TR Low Inventories High Service Fewer Expedites

8. Before Demand Driven – FMCG Example (soap) 8

9. Before Demand Driven – FMCG Example (soap) 9 Raw Pack Mix Room Pack 1 Pack 2 Pack 3 DC DC DC DC 50+ Days Planned Orders (MRP) Purchase Orders Manufacturing Orders Expedites/ Schedule Break-ins

10. DDMRP Design – FMCG Example (soap) Manufacturing Orders Stock Transfer Orders 10 All material and content © copyright 2013 Demand Driven Institute. All rights reserved. Certified Demand Driven Planner (CDDP) is a trademark of the ISCEA Raw Pack Mix Room Pack 1 Pack 2 Pack 3 DC DC DC DC 9 Days HUB 3-8 Days Purchase Orders

11. Immediate Results for Materials – FMCG (soap) 11 300 Materials are buffered without increase in RPW inventory. This is accomplished with 18% less total RPW. Dampened the bull whip, now operating more effectively, with less working capital Before Replenishment lead time has been After reduced 82% to 9 days from 50 days, becoming Responsive Finished Goods dropped 45+% with consistent services level at or above 99.7%

Case Studies from the Demand Driven Institute

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Case Studies from the Demand Driven Institute