An MRP system is used to typically answer what items are required? how many are required? and when are they required?. It answers these questions by taking inputs from Master Production Schedule Bill of Material Inventory Status Records. MRP was commercialized in the 80’s but it hasn’t adapted much to the meet current needs. For example, product lifecycle has reduced drastically, there is more customization, customer tolerance time has reduced, there is more product variety. Also, an MRP system is highly dependent on different business processes and changes in any process usually affect other processes. Due to this, MRP has been facing problems such as an error in forecasting, which results in having more/less inventory or having the wrong inventory.
These problems can be overcome by using a Demand Driven MRP(DDMRP). In DDMRP, only qualified sales orders within a short range horizon qualify as demand allocations, sales orders give a near perfect demand signal in terms of what will be sold and when it will be sold. This means there are fewer variations and additional costs such as the need to expedite a process can be reduced. Also inventory size would be ideal, neither too less nor too much.
http://demanddrivenworld.com/wp-content/uploads/2014/06/Lunch-and-Learn-Supply-Chain-5.22.14.pdf
http://www.beyondmrp.com/demand-driven-mrp-benefits/
https://visiepartners.nl/NL/opleidingen/ddmrp-demand-driven-mrp