Declining Market of Chinese Car Production - Essay Example

Inventory Planning started when the Material Requirement Planning (MRP) was in place. In 2011, the plan was renamed to Demand Driven Material Requirement Planning (DDMRP). Since its introduction, it has replaced other methods such as statistical inventory control, inventory management, and production. The MRP principle has been in place since the 1950s and it was implemented mostly by buyers and ERPs.It was until the 1970s when MRP was commercialized but its principle still exists.

In the application of MRP strategy planning, there are various issues such as order point systems, time phase order point, and understanding the theory of constraint.  The Aberdeen Group research conducted in December 2010 about inventory optimization technology for supply chains indicates that many companies are seeking to improve their supply chain in processing and technology.

The analysis of the Manufacturing Resource Planning (MRP 2) is informed by various sectors for it to succeed. This includes a business plan which supplies commodities to the market, the availability of materials, and the cost. The company considers the capacity to obtain materials for production and the customer's need for the material. The next process is material requirement planning, where the Company considers the cost of every material required and where to get the material.  They manufacture the items and try to control the prices and test their performance.

The challenges faced by current production include global demands, the life cycle of products, customer tolerance, complexities and customization of products, pressure for inventories inaccurate forecasts, and varieties of products.

Demand Driven MRP, which is a multi-echelon material, was advanced after MRP2. It has five components which are strategic inventory positioning, buffer profile and levels, dynamic adjustments, demand-driven planning band, and collaborative execution.

A discussion with Kristen Melendez and Tracy Brown indicated a correlation with matters discussed in the after-dinner presentation. They have experience in supplies and logistics and they also offer consultancy services. Their business cards are attached below. The two cited a lack of careful consideration of the supply-demand analysis which they said was well addressed by DDMRP. According to Kristen, production should take into consideration the cost of materials which consequently affects the price. While Brown said that the solution to the current problem will just be accomplished if companies adopted the DDMRP strategies.