How DDMRP buffers have saved my wine drinking ability during lockdown


I know many of you have already run short of your favourite ‘Tipple’ during these difficult times and the ban on liquor sales. My name is Ken Titmuss and I live in Cape Town and over the last few years I have spent my time educating people in the DDMRP methodology and implementing DDMRP systems for my clients. Luckily, a DDMRP buffer has save my ability to have my normal glass of wine, occasionally. Here is how it works. I just look at the overall number of bottles in my ‘cellar’ and not at the individual cultivars or brands. Normally have a mix of about 50%/50% reds and whites.


Living in the Western Cape I enjoy buying my wine for the local farms. My ADU or Average Daily Usage is estimated at about 0.333 bottles per day. I generally replenish my wine cellar stock approximately every 2 months, or 60 days, I like Nice-Round-Numbers (NRN). And when I buy, I usually buy 2 cases of wine at a time, usually one carton of white and one of red.


So, I set up my DDMRP cellar buffer with a Minimum Order Quantity (MOQ)of 24 bottles, the lead time of 60 days, my ADU is 0.333 bottles per day. I have used a Lead Time Factor (LTF) of 50% and a high Variability Factor (VF) of 100%, as demand for the wine can vary considerably due to dinners and parties.


So, calculating the buffer:

  • The Yellow Zone is LT x ADU = 60 x 0.333 = 20 bottles.

  • I have a significant MOQ of 24 bottles, so that is the sizes of the Green Zone.

Then, for the Red Zone:

  • Red Zone Base = LT x ADU x LTF = 60 x 0.333 x 0.50 = 10 bottles

  • Red Zone Safety = Red Zone Base x VF = 10 x 1.0 = 10 bottles

  • Total Red Zone (ToR) = 10 + 10 = 20 bottles

Therefore, the Average Inventory in my wine cellar buffer is Total Red Zone (ToR) + half of the Green Zone = 20 + 12 = 32 bottles. That is, at my current ADU, enough for about 96 days, or about +/- 3 months.


After 42 days in lockdown, I see I have 22 bottles still in my cellar stock, enough for nearly 2 months. This puts the On-Hand balance just above ToR.


My Net Flow calculation is now, On-hand + On Order + Todays Usage = 22 + 0 – 0.333 = 21.666. With Top of Yellow (ToY) at 40 bottles, I need to order as Net Flow is in the Yellow Zone and I therefore need to order up to the Top of Green (ToG), which is 64 bottles. So, order size is Top of Green – Net Flow = 64 – 22 = 42 bottles.


It seems I need to find a wine farm that will accept my order for delivery of 42 bottles after lockdown, which ends, hopefully before I run out in about 2 months.


So, if DDMRP has worked for my wine cellar and is taking the shock out of our current situation, why will it not work for any SKU, anywhere in the Supply Chain. If you are not using DDMRP to manage your stock positions, then maybe you should be.


At least, for the time being, I can still say Cheers!”. Keep well and for most of you, not using DDMRP, sober!


This article was presented by:


Ken Titmuss

CFPIM, CSCP, SCOR-P, CPF, CS&OP, PLS, CDDP, CSCA, CDDL, CLTD Chief Executive Officer at Kent Outsourcing Services

Email : ktitmuss@mweb.co.za

LinkedIn - Profile


Ken is a Supply Chain, Operations and Manufacturing consultant over the last 30 years. He have worked with well over 200 companies.


The opinions expressed in this article are those of the author.


Discover how the CSSC Certification Program is Transforming the Careers of Supply Chain Professionals, and assisting organizations transform their supply chains into value chains.


Take advantage of this opportunity to put your company out front, and not only have a well-qualified workforce, but also a workforce that will enjoy their work as they will not only know what they are doing, but perhaps more importantly why they are doing it.

CSSC, Certified Stores & Stock Controller and CPIA, Certified Production and Inventory Analyst


Connecting Minds & Inspire Learning

Take advantage of the FREE Resources available at BicaraSupplyChain. Due to Coronavirus Covid19 and highly stressful conditions we can keep sharing knowledge and advice to solve problems is the most crucial for the future of charities.


Be better prepared for when the world returns to "normal". LEARN from SupplyChain Experts to pick up the pieces after the dust has settled. We broadcast every week and all year around the most up-to-date series of podcasts.

BicaraSupplyChain

0 views0 comments

WORLD HEADQUARTERS

VCARE Academy Inc.

154 Bestview Drive Toronto,

M2M2Y3, Ontario, Canada

OUR ASSOCIATIONS 

OCC-Logo-color.png

Supply Chain Podcast Platform

Bicarasupplychain.com

Listen Bicara Supply Chain Podcasts on your favorite Platform >

Bicara Podcast_2. Spotify .jpg
Bicara Podcast_5. Apple Podcasts
Bicara Podcast_7. Castbox.jpg
Bicara Podcast_1. Anchor.jpg
Bicara Podcast_3. Stitcher.jpg
Bicara Podcast_8. Overcast.jpg
Bicara Podcast_4. Google Podcasts.jpg
Bicara Podcast_6. Breaker.jpg
Bicara Podcast_10. RadioPublic .jpg

FOLLOW US ON SOCIAL MEDIA

  • LinkedIn
  • Facebook
  • Twitter
  • YouTube

Copyrights © 2020 VCARE Academy Inc. - All Rights Reserved | Developed by Artxel Technologies