Prioritized Share: Stock Deployment Module

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The Stock Deployment module is an optional add-on module that uses the DDMRP method of prioritized or fair share to deploy stock from a sourcing unit to distribution units. The goal of fair share deployment is to balance network net flow positions equally. The SDM calculates deployment quantities to balance net flows as closely as possible to ensure equal distribution according to buffer levels, not inventory quantities.

When to Use the SDM?

The SDM should only be used when network locations are centrally planned. In a supply chain that has its own manufacturing unit, the sourcing unit could be the manufacturing unit, or a central warehouse where all manufactured goods are received first, for further distribution to the network. In a pure distribution network, the sourcing unit could be the central warehouse where all goods are received first, for further distribution to the network.

If network locations are independently planned, then the SDM may not be useful, as the forward locations are managed independent of each other. Technically, these locations are not “networked”, as they don’t depend on each other nor on a central buffer for their supply.

Advantages of a Central Buffer/Sourcing Unit

• Proactive distribution to end locations

• Reduced Lead Times on items at end locations

• Reduced inventory levels at end locations

• Greater stability in inventory levels and protection against variability at end locations

Key Terms

Term	Definition
Sourcing Unit	a.k.a the Central Buffer; a location or unit from which stock is deployed
Hub and Spoke	a sourcing model where there are buffers at both the Sourcing Unit and the end locations
Direct Ship	a sourcing model where there are buffers at the end locations but not at the Sourcing Unit
Holdback	in the Hub and Spoke model, the EDU of a part at the Sourcing Unit will equal the ADU of the part at the Sourcing Unit plus the ADU of the part at the end location. The holdback is a % calculated using this sum and applied to ToR to protect the on-hand quantity at the Sourcing Unit for direct customers.