Distribution Requirements Planning (DRP-I) is an integrated time-phased planning and control system for a business’s warehousing and transport activities.
DRP bridges the gaps between:
- The factory;
- The central warehouse;
- A network of regional warehouses; and
- The customer – which could be another company, a wholesaler, a retailer or the end consumer.
DRP logic is similar to MRP. It works backwards, moving up the distribution chain from customer to regional warehouses, to the central warehouse and ultimately to the factory.
Each regional warehouse in the system generates a demand figure; the demand the warehouse will place on the central warehouse during each time bucket.
This will normally include a forecast of demand well past the replenishment lead time. DRP operates to planning parameters such as, delivery, quantity, lead-time and safety stock level (while they may vary between regional and central warehousing).
