When evaluating if Demand-Driven Planning is the right approach for their business, companies immediately face a challenge: What are the real benefits of implementing it, and how do you quantify them? 

Sure, if a company is considering it in the first place, it is because they are facing some challenges – either with their service level (too low), their inventories (too high) or a combination of both. But there is much more than that.

Providing a fix for immediate supply chain pain points only scratches the surface of what DDMRP offers – Demand-Driven Planning is a strategic shift impacting working capital, operational stability, planning productivity, customer service levels, and even supplier relationships. 

Yet, despite its potential, effectively communicating and proving a credible business case is a challenge. Too often, initiatives stall due to a lack of framing to translate operational pain into a financially compelling opportunity.

Why a Strong Business Case Matters

The classical case we face with our clients is that the promoter of the methodology in middle management understands the benefits and value intuitively. They see the inefficiencies and sense the opportunity, but intuition alone doesn’t unlock action (and the funding to make it happen). 

Even for the promoters, Demand-Driven Planning methods or DDMRP are new concepts and remain unfamiliar territory in the boardroom. They often find themselves lacking the right language, or data points to build a convincing case that resonates with senior leadership.

Without a clear, quantified business case, promising initiatives are delayed or dismissed — not due to lack of merit, but due to lack of framing. Turning that early conviction into executive-level buy-in requires a structured approach to articulating value – both the tangible and the intangible.

What are the levers for a business case?

Some levers are tangible benefits, such as inventory, expediting, and planning productivity. These can be quantified relatively easily; however, not all key benefits are easily measurable. 

What about the intangibles? Reduced firefighting and crisis management, improved employee well-being and reduced burnout, and increased planner focus and proactive decision-making – these may be difficult to quantify. Still, their impact on operational performance and cost structure is real. They represent second-order effects that, while often overlooked, are what truly strengthen and sustain the business case. 

1. Inventory Reduction

We always say that DDMRP should not be seen as a tool for cutting inventories. And yet, inventory reduction is one of the most important and tangible financial benefits: the one-time cash release related to inventory mobilisation. 

Simultaneously, right-sizing inventories bring a lot of additional benefits. It reduces write-offs and disposal costs for obsolete inventory, warehouse space occupation, transportation costs, and other logistics costs that fall on a “per unit” calculation (when you pick and transport goods in your network that will not be sold, all these activities generate an avoidable cost). And finally, there is a reduction in working capital financing costs.

2. Stock Availability

The second big lever for a business case calculation is an increase in stock availability. Increasing the availability of finished goods will improve service levels, reduce backlogs, and reduce lost sales. Financially quantifying these elements is one bit harder than inventory reduction, but – with the right tools and methodologies – it is still quantifiable. 

Increasing the availability of both finished goods, semi-finished goods, and raw materials will improve manufacturing productivity as manufacturing plans and schedules will become more stable. Many manufacturing operations lose productivity because they have to change their schedule to accommodate an urgent demand or because a critical component for a production order is missing. 

DDMRP will massively reduce the occurrence of these events. For instance, one of our clients reported that they didn’t even imagine how much capacity they were wasting in production. After implementing DDMRP, they realised that they had much more capacity than they thought.

3. Expediting Expenses

Another tangible benefit of the above is the reduction in expediting costs. This includes expenses for overtime and expenses for non-standard shipments and urgent deliveries. For instance, in our first ever DDMRP project in a distribution network, the client completely eliminated cross-shipments between warehouses to rebalance inventories.

On a less tangible level, we should include all management time lost in firefighting, managing angry customers, and holding crisis meetings. This means that companies are likely to employ more overhead than they actually would need if things would run smoothly. 

There are also costs related to high turnover, stress-induced illness, absenteeism or even burnout of staff.

4. Planning Productivity

DDMRP planning is intuitive and transparent. It provides exceptional visibility on the status of activities and where issues are expected. Combine that with a reduction of firefighting, the result is that a planner can double their productivity. One of our clients cancelled an already budgeted position for an additional planner in their team because after implementing DDMRP, they realised they didn’t need it anymore.

5. Relations with Suppliers and Customers

While not immediately quantifiable and often determined on a case-by-case basis, you may be overlooking this strategic advantage in your company. A client of ours reported that the higher stability of the demand plan passed to their suppliers (i.e. making the life of their supplier easier) would bring the company to a better negotiating position for discounts.

In addition, DDMRP is the perfect tool for implementing Vendor Managed Inventory (VMI) and consignment stock solutions with customers and suppliers, as it creates the planning stability and visibility required to support them. This is another lever which, when pulled effectively, reduces buffer stock requirements, improves replenishment accuracy, and can yield significant savings and service improvements across the value chain.

Your Business Case, Accelerated by Expertise

At ABA, we combine deep expertise in the Demand-Driven methodology with the technical tools to quantify the tangible and qualify the intangible – with clarity, credibility, and speed.

We understand not only how DDMRP works but where it works and why. Deploying senior experts like Patrick Rigoni, we can: rapidly assess your supply chain, identify the applicable value levers, and how they are likely to shift to calculate the impact across inventory, availability, productivity, and beyond.

We offer a fast, focused engagement designed to put you in control. With low overhead, clear deliverables, and fixed costs, we help you build your own business case that articulates value clearly and with confidence.

Is Demand-Driven Planning Right for You? Start With the Right Business Case

The Demand-Driven Planning methodology is more than planning – it’s a strategic enabler for operational transformation. But it’s not just about the potential; it’s about building a strong, credible business case – one that secures buy-in and sets a clear direction for implementation. 

If you’re asking whether DDMRP is the right approach for you, start by understanding what the real impact could be in your supply chain context. 

Book a free 30-minute discovery call with Patrick Rigoni to explore where DDMRP could bring value – and how to frame that value clearly from the outset.