Real-time & resilient: discrete manufacturing MRP requirements

You could be one of the many manufacturers who are using the material requirements planning (MRP) module in ERP; but are you one of the minority using a system that truly works for your business. You might remember having shelves full of every part under the sun but never the parts needed for production. When you finally decided that your legacy MRP module wasn’t cut out for the job, it took a year to get production and purchasing back into sync. Are you going to do that again?

The basics

MRP requires a lot of discipline to run it well. Many discrete manufacturers have operated as seat-of-the-pants businesses for a long time. Some employees like working in that environment, and many customers like doing business with easy-going, family-run suppliers. However, customers have evolved; they are looking for discipline and a well-oiled machine in which errors and omissions are almost never made.

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Most MRP modules worth their salt can plan production jobs well in advance so scheduled jobs can be updated and monitored within ERP. MRP modules should also plan purchasing so that most purchase orders can be linked to scheduled jobs or inventory requirements. When you take advantage of this system simplicity, you can use the time saved for valuable analysis of unique jobs and purchase orders.

Real-time inventory

MRP modules depend on accurate inventory records. Bills of material, production time estimates, and purchasing lead times must be accurate. Determine whether yours are accurate in real time or whether your inventory is only accurate when one of the planners manually checks and verifies stock level.

If the latter describes your inventory processes, you really need an MRP module with self-reporting inventory powered by feedback from WIP and accurate supply chain data. You should also look for an ERP system which provides exception reports and alerts that will help you develop the accuracy you need to achieve this self-reporting system.

Inventory resilience

You might not currently perform cycle counting, but a new ERP system should have functionality to support the process and downstream improvements in inventory accuracy. Instead of conducting a specific analysis well after the inventory value is lost, alerts can help you avoid surplus inventory by warning you as soon as the condition of the inventory changes. In the current manufacturing climate, a resilient MRP module that can adapt to disruptions in supply or changes in demand.

How accurate are your bills of material? Are they in pretty good shape, or do they leave a lot to be desired?

Most of us agree that we need to run our discrete manufacturing shop with the discipline required to provide the results our customers want. We need accurate, on-time production jobs. We need discrete purchase orders to be placed and received when required. Upgrading your ERP system to include real-time and resilient MRP will help you achieve those goals.

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Tom Miller

About the author…

Tom completed implementations of Epicor, SAP, QAD, and Micro MRP. He works as a logistics and supply chain manager and he always looks for processes to improve. He lives near San Francisco Bay in California and can be found on the water in his kayak or on the road riding his motorcycle. Contact Tom at customerteam@erpfocus.com.

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Tom Miller