What are BOMs used for?
In traditional BOM approaches, all components of a product are treated as dependent demand, leading to long lead times if any part is delayed. However, in the DDMRP approach, some components might have strategic inventory buffers, ensuring assembly can continue even if some orders are delayed. Managing a BOM efficiently helps optimize material flow and reduce lead times.
In DDMRP (Demand-Driven Material Requirements Planning), Bills of Materials play a crucial role in defining where strategic decoupling points should be placed and how inventory buffers are sized. Unlike traditional MRP, which explodes BOMs to determine dependent demand, DDMRP strategically decouples it to support flow.