Kanban vs. MRP Items in Sage 500 ERP (MAS 500)
Many wholesale distributors and manufacturers have embraced lean replenishment software and lean manufacturing software methodologies throughout the years to reduce inventory, reduce stockouts, reduce inventory costs, and to streamline their lean supply chain planning.
Lean distribution software philosophies and lean manufacturing software strategies can significantly improve the lean supply chain planning process but many strategies have a direct impact on distribution requirements planning (DRP) and material requirements planning (MRP).
One common lean supply chain strategy is Kanban. Kanban systems evaluate item demand at the warehouse level to determine if the item has predictable demand (relatively smooth demand) over a period of time. The calculation for determine this is called a coefficient of variation (CV). Items with a low CV value (typically under 2.0 or 1.5).
Kanban was originally developed in Japan by Toyota as a pull system by sizing quantities of a part in bins (typically a two or three-bin system). The concept is that when the first bin is empty the Kanban card will be scanned or entered to trigger replenishment of the bin for de defined quantity of the item for that warehouse. By the time the replenishing quantity is received, the second bin should be almost empty triggering another replenishment order.
Items that have inconsistent demand are typically replenished using traditional DRP or MRP planning software like Anytime Supply Chain software.
Planners can determine what products to replenish via Kanban and which items to replenish via MRP/DRP. This is important since planners must have a way to exclude Kanban items from MRP/DRP or they will end up with duplicate replenishment orders in the system – one from the manual Kanban system and others from DRP/MRP software.
Items can be defined for replenishment by warehouse so Anytime Supply Chain software can be setup to ignore Kanban items from material plans. There are a lot of different ways to segregate these items so that planners are only managing those items that should be included in the DRP/MRP planning software workbench.
e2b teknologies is the original developer of Sage 500 MRP software. The Company continues to develop new features for Sage 500 MRP software and now offers Anytime Supply Chain software, the next-generation cloud MRP software and cloud DRP software is available for Sage 500, Sage 300, Sage 100, Intacct Financials, Intuit QuickBooks, and other accounting and ERP business applications.
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