The groundwork is done. The relevance of Demand Driven Material Requirements Planning (DDMRP) to your business has been assessed, and both the tangible and intangible levers outlined in our previous article – inventory, service, lead times, and productivity – have been reviewed. It’s clear: DDMRP makes sense.

But while the structure of the case may be clear, turning conceptual understanding into a financially credible case is another matter. What, for example, is a realistic estimate for inventory reduction, and what does that translate to in working capital savings?

We’ve seen many companies stall here in their transformations. Without the right tools, methodologies, and reference frameworks, how do you quantify how far each lever can move? How do you connect operational impact to financial value, both in terms of investment and return?

Too often, companies drive transformation without the ability to confidently estimate the investment required (consulting, software, internal resources), anticipate the timeline and implementation effort and quantify DDMRP’s benefits needed for the proposal to take shape.

The good news? These can be addressed — and quickly. Building a compelling business case should take weeks, not months.

The Common Pitfalls of Business Case Development 

In our extensive experience with DDMRP implementations, we’ve identified several recurring pitfalls in the case formation process, all stemming from the same root causes: limited resources, technical gaps, and a lack of structured support.

Each of these challenges creates friction in the decision-making process. Left unresolved, they can delay or derail the momentum behind a transformation initiative.

1. Quantifying the Value of a DDMRP Transformation

By this stage, most organisations have a general understanding of the benefits that Demand Driven MRP (DDMRP) can offer. The concept has likely circulated internally, and perhaps a few managers have undertaken a Demand Driven Planner course. While this provides foundational theoretical knowledge, practical, hands-on experience is typically lacking.

However, when it comes to gaining executive approval for a DDMRP initiative, qualitative statements alone are insufficient. Claims such as “we’ll reduce inventory,” “service levels will improve,” or “production will become more stable” may resonate in principle. Still, they will not withstand financial scrutiny unless they are backed by quantitative evidence. 

It is essential to translate these qualitative advantages into concrete metrics: Which operational KPIs will shift, and by how much? Once these shifts are modelled, they must be further translated into financial impact. This is where the business case starts to take shape.

But here’s the challenge: most companies at this point in the journey do not have the internal expertise to conduct this analysis with confidence. As a result, proposals often rely on speculative assumptions, overlook critical benefits, and overpromise outcomes. This leaves the proposal exposed, especially when it reaches the CFO’s or CEO’s desk. These leaders will probe the figures and challenge the underlying logic. You must be prepared with a coherent narrative, a well-structured model, and defensible data.

2. Overlooking Broader Operational Effects

Too often, business cases focus narrowly on immediate levers and ignore secondary effects. 

One of the most commonly overlooked areas in the early stage is the positive impact that DDMRP will have in creating stability in production plans and improving the management of constrained resources. These changes can significantly reduce queuing times, compressing manufacturing lead times. This domino effect results in lower Work In Progress (WIP) inventory and a shorter cash-to-cash cycle, both of which directly impact working capital and cash flow.

These second and third-order effects are often important value drivers in a DDMRP transformation. Identifying and quantifying them is crucial, not only to build a compelling case but also to ensure stakeholders understand the broader strategic impact beyond immediate operational improvements.

3. Absence of Analytical Tools and Simulation Capabilities

Another frequent obstacle in building a robust DDMRP proposal is the absence of the right tools to evaluate operational performance improvements rigorously. Without proper analytical capabilities, estimating benefits becomes speculative and time-intensive, which compromises the proposal’s credibility and timeliness.

At AB Advisors, we address this challenge by leveraging advanced simulation tools to compare current inventory performance with optimised future-state scenarios. Critically, this analysis can be performed on a significant subset of the product portfolio – and in many cases, across the entire range – ensuring a comprehensive and data-driven foundation for the financial case.

Consider a recent engagement with a client in the industrial goods sector operating under a hub-and-spoke distribution model. Through simulation, we uncovered a key insight: there was minimal opportunity to reduce inventory at the country level (spokes). In fact, several locations were understocked, creating service-level risks. However, the central hub held over 40% excess inventory. The misalignment stemmed from outdated replenishment rules and poor demand visibility.

By clearly identifying where the real improvement opportunities lay, this analysis enabled the team to scope the project better and focus the efforts where they would have the most impact. This led to a more realistic and defensible quantification of the expected benefits, strengthening the investment rationale and aligning stakeholder expectations from the outset.

4. Incomplete View of Implementation Costs and Effort

When organisations first approach us about Demand-driven transformation, some of the first questions they ask are: “How long will it take?” “What will it cost?” “How much are software licences?”

These are essential questions. The case must also include a clear estimate of the required investment – covering consulting services, internal resource allocation, and software licensing – and a realistic implementation timeline.

This is often another blind spot for organisations, especially those without prior experience in DDMRP deployments. Assumptions based on previous Advanced Planning System (APS) implementations can be misleading. Unlike traditional APS projects, DDMRP implementations are typically more straightforward, more focused, and significantly more agile, resulting in faster execution and lower total costs.

For example, a pilot implementation of moderate complexity typically spans three to four months. Using our structured and proven implementation roadmap, along with our expertise in typical software licensing models and cost structures, we can provide indicative cost estimates quickly. This provides stakeholders with the visibility they need to make informed decisions, thereby helping to build alignment and momentum around the initiative from the outset.

Bridging the Gap: How AB Advisors Enables Rapid, Data-Backed Decision Making

Identifying the right levers, gathering the necessary data, analysing the numbers, and articulating the results in a compelling, executive-ready proposal shouldn’t take months. In fact, with the right approach and support, it can be done in a matter of weeks.

At AB Advisors, we bring the structure, experience, and tools needed to accelerate this journey. We help organisations define the scope of their DDMRP transformation, estimate the required investment — including consulting and software costs — and quantify the expected returns. Our standardised yet flexible templates simplify the ROI, break-even, and Net Present Value (NPV) calculations, ensuring clarity and credibility in front of senior leadership.

Our simulations, driven by your real operational data, reveal the true potential of a DDMRP implementation. We then use the most conservative, validated outcomes to craft a grounded and defensible business case.

For example, recently, we helped a client in the healthcare industry build robust business cases in under two weeks. This included inventory simulations across hundreds of SKUs, detailed ROI and NPV projections, implementation cost estimates, and building a management presentation deck — all delivered on a timeline that matched internal decision cycles.

Ready to Build Your Case?

AB Advisors gives you the structure, tools, and insight to avoid those missteps and accelerate both your business case and its execution.

We work alongside your team to focus effort, validate assumptions, and deliver the numbers that matter—rapidly.

To explore how we can support you, book a free 30-minute call with Patrick Rigoni.