Buffer Profile Elements

Buffer Profile Elements

Traditional DDMRP Buffer Profile

A traditional DDMRP buffer profile is made up of 4 parts that not only tell you information about the part, but also determine buffer sizing and order frequency. A buffer profile has two letters and two numbers in it and can look like this:

B11C, M22P, D34M

The above are just examples of the type of buffer you could see. However, there are any number of buffer profiles that could exist in your R+ instance, each with their own combination of letters and numbers depending on the settings in your Smart Buffer Profiler.

Replenishment Method

The first letter indicates the replenishment method that this profile is associated with:

• B = Buy

• M = Make

• D = Distribute

Lead Time Identifier

The first number indicates the length of the lead time relative to other profiles. Larger lead time identifiers point to longer lead times. Longer lead times are inversely proportional with lead time factors that are applied to the green and red zone.

Variability Identifier

The second number indicates the variability level of the part. Higher numbers correspond to more variable demand items, and lower numbers are indicative of steady runners. Higher variability will indicate a higher Red Zone Safety Percentage and will thus create a larger Red Zone.

Order Sizing

The last letter indicates the method for the green zone calculation. The Green Zone drives order sizing and can be calculated using one of three methods. The largest resulting value is used to size the green zone. The green zone is calculated using the following methods:

1. Calculated Method = Average Daily Usage x Lead Time x Lead Time Factor

2. Order Cycle Method = Order Cycle Days x ADU

3. Minimum Order Quantity value (MOQ)

Statistical Red Zone Buffer Profile

If you choose to use the Statistical Red Zone Method for your Red Zone sizing, the Buffer Profile can look much different depending on how you prefer to organize your data.

With the Lead Time Factor and Variability Factor less relevant to the sizing of the buffer, those numbers can be removed. The Part Type can be left in based on personal preference. You may want to also include an indication of what Green Zone Method you choose to use.

The new pieces that should be added to this profile are the probability factor and optionally, any additional days in Red or Yellow Zones you choose to add.

Buffer Calculation Components

Average Daily Usage

Blended Daily Usage (Effective Daily Usage)

Forecasted/Forward Daily Usage

Lead Time Factor

Lead time factors are percentages applied based on the R+ Lead Time of an R+ Record. Longer lead times equate to smaller lead time factors and shorter ones result in larger lead time factors.

Minimum Order Quantity (MOQ)

This is the minimum amount of a part that you need to order each time you place an order. The MOQ can be used to determine Green Zone Size.

Order Cycle

RPlus Lead Time

Variability Factor

The coefficient of variance is used to measure the variability of an R+ Record's demand history over the course of a year. More variable items will have higher variability factors whereas low variability items will possess lower values. As a result, more variable items will have larger red zones to protect against that variability.