Growth is the lifeblood of any successful company. Scaling and FMCG product manufacturing facility while maintaining a 95%+ service level to customers is a challenge that many businesses struggle to navigate. At Saradox, we have grown from a 500sqm factory to a 4000sqm facility in just 10 years. Yet, despite this expansion and our ongoing growth, we are still using the same inventory and planning system that we started with—because it works!
The Secret: Demand Driven Material Requirements Planning (DDMRP).
Our supply chain success is rooted in the principles of Demand Driven Material Requirements Planning (DDMRP) and production scheduling. By leveraging a simple yet efficient inventory management software with an accessible SQL database and an Excel-based visual replenishment and planning system—we effectively manage the manufacturing of 370 SKUs and 2,000 individual items, ensuring that we continue to deliver a 95%+ average service level to our customers.
Our system calculates replenishment requirements across our entire customer network by integrating DDMRP principles. It establishes dynamic, demand-based buffers that smooth demand variations and protect material flow, ensuring seamless manufacturing and supply operations.
Make-to-order products, like some of our gift sets, are superimposed on the system and integrated into the planning and order framework.
How Our DDMRP System Works
We use a four-zone buffer system to regulate inventory and demand fluctuations:
🔴 Red Zone – Our safety stock, ensuring that we always have critical items available.
🟡 Yellow Zone – Our expedite zone, allowing us to quickly replenish stock when demand spikes.
🟢 Green Zone – Our target buffer level, maintaining optimal inventory levels to satisfy customer requirements.
🔵 Blue Zone – Our optimal buffer. This zone indicates the ideal stock level but also warns us not to overstock.
To account for unexpected disruptions, we’ve also built Murphy variables into our system, ensuring that our supply chain remains agile and resilient, while still ensuring optimal financial stock holding.
Managing Complexity as We Expand
As complexity increases, the supply chain has to adapt. Over the last four years, we have significantly expanded our customer base locally as well as internationally. Our warehouse and systems handle a wide variety of orders—direct to customer (online sales), direct to store, direct to distribution center, as well as fortnightly export containers.
Some of our key challenges include:
- Exporting to 22+ countries – With fortnightly container orders, we must navigate variability in demand and shipping delays caused by port congestion and customs regulations.
- Market-specific demand variations – Different products perform better in different export territories, making it difficult to establish predictable replenishment criteria.
- Uncertain lead times – Export customers rarely provide accurate sales data, adding an extra layer of unpredictability to our planning efforts.
The Results Speak for Themselves
Despite these challenges, our DDMRP-driven system enables us to stay ahead of demand fluctuations, minimize stockouts, and optimize inventory levels—all while maintaining high service levels for our customers.
By combining smart planning, simple yet effective tools, and a demand-driven mindset, we have built a supply chain that supports sustainable growth.
