Business Terms Dictionary

Red Zone

The lowest-level zone in a DDMRP buffer, representing the critical stock level that signals an urgent need for some action. © Copyright 2025 Demand Driven Institute. Used with permission.

What is it used for?


In Planning Buffers it consists of Red Zone Base (minimum stock requirement) and Red Zone Safety (protection against variability). If the Net Flow Position (NFP) has entered this zone, it is a sign that the buffer is not properly managed, maybe because the sizing parameters are no longer accurate to the current situation of the part, or maybe because the manager in charge did not emit the necessary replenishment orders when the NFP reached the Top of Yellow.

In Execution Buffers the Red Zone is color-coded red to indicate a serious stock situation and order expedition may be necessary to ensure that materials are received before shortages disrupt operations. 


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Running out of stock can halt production and impact service levels. ForgeFlow Cloud ERP ensures accurate buffer monitoring, automatically triggering replenishment recommendations and helping you to avoid stockouts.
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