Balancing supply and demand is much easier said than done. On the surface it seems like a simple concept, but when you get down to it, supply chain management is no easy task and even experienced supply chain managers make mistakes. Unfortunately those mistakes can be extremely costly to an operation when the main goal of any manufacturing company is to fufill customer needs while minimizing the expense. Some mistakes you simply cannot avoid as a member of a supply chain, but other mistakes, the most common mistakes, are easy to avoid when you break them down, apply best practices, and have a solid MRP software solution.
Here are a few of the mistakes mentioned above, the kind that can be avoided to help you exceed your customer expectations and keep overhead to a minimum.
- Supply mistakes. This is a very common problem when demand forecasts are made and inventory information in your ERP system is not accurate. Your forecast may call for 100 units of an item in a month but if your inventory is incorrect it may tell you that you are covered for it, when it reality you only have 50 of that item! MRP software can help you make sure this doesn’t happen to you through integration and automation between your important systems. other supply mistakes that can hinder planning include:
- Incorrect vendor lead times
- Not accounting for supplier delivery and quality performance
- Not planning for inter-warehouse stock transfers
- Date mistakes. in manufacturing, everything comes down to your schedule! dates are something that cannot be messed up, You use them for everything! Here are some questions you need to ask yourself:
- Which dates is your system using for sales orders?
- How do these dates consume forecasts which may be in different period sizes?
- Is your bill of material and manufacturing labor routing accurate in respect to procurement lead times for raw materials and manufacturing cycle times for production?
- Does your system take into account the time it takes for materials to move to different work centers or queue times where products must cool, dry, or otherwise wait until they can move to upstream manufacturing operations?
- Does the system allow you to define time to setup or reset a machine or work center or other factors that will impact product quality and production time.?
- Quantity mistakes. If you are stocking based on one unit of measure, purchasing in another, and manufacturing in a third unit of measure, it is important that your system allows for the definition of a minimum, maximum, or to order multiple for items you buy, transfer, or make. Does yours? The system needs to know what quantity to suggest based on these internal, customer, and supplier requirements.
There are MANY other common mistakes that can be avoided to improve your supply chain, about 23 to be exact. Find out what those mistakes are ( you are probably making them and may not know it yet) and how you can avoid them by downloading this free white paper