The full form of DRP is Distribution Requirements Planning.

With the many aspects of supply chain planning, distribution or materials has a growing focus as being a vital component to production. As demand can vary, how can a manufacturing operation properly plan for the amount of goods that are required on-site and to be positioned? How efficiently can the goods arrive at the correct location in the amount of time given? Let’s explore DRP a bit further.

DRP-related questions are what project managers are asking themselves about when it comes to optimizing flow in these ways: shortage minimization, reducing transportation cost, order reduction and refinement of delivery timing.

Distribution requirements planning (DRP) is the process in which goods are delivered in a more efficient manner. These include considering the aspects of establishing a good, quantity of the good, and the direct location that it is needed to arrive at in a given time. Distribution requirements planning will benefit the operation as a whole through the increase in efficiency through the following benefits:

• Faster Decision Making
• Utilization of Demand Forecasting
• Planning Initiation Accuracy
• Cost – Awareness
• Customer Service Enhancement
• Push or Pull Method

The pull or push method is utilized by DRP distribution, with pull and push differing from each other. The pull method includes goods shifting upward throughout the system and obtaining customer order achievement. Although management controls the amount of goods available, distribution inventory management is challenging because all orders are considered new to the supplying location as the demand is flowing upward, which is otherwise known as the “Bullwhip Effect”.

Distribution requirements planning (DRP) is a systematic process to make the delivery of goods more efficient by determining which goods, in what quantities, and at what location are required to meet anticipated demand. The goal is to minimize shortages and reduce the costs of ordering, transporting, and holding goods.

Also known as distribution replenishment planning, DRP is a time-based approach that determines when inventory is likely to be depleted and plans replenishment to avoid shortages. DRP uses a tree-like structure where a central facility, such as a warehouse, supplies regional facilities which then supply other facilities in the tree. This structure can contain any number of layers.