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. Continue reading
Finite Scheduling Impact on Infinite MRP Calculations MRP software by nature is infinite in respect to planning for requirements and does not consider resource constraints such as labor, machines, tooling, or other resources. As such, companies have two decisions to make to implement a more accurate material plan – build in buffers using lead times or integrate their MRP planning software with an Advanced Planning and Scheduling system.
MRP software can be very complicated as-is with a multi-level bill of material. However, this can be a nightmare for planners in environments where items are transferred between warehouses. Consider a common scenario where a main stocking warehouse for purchased raw materials is used to fulfill (via transfer orders) shop floor stocking locations (warehouses) for manufacturing work orders. Then consider that demand on the finished goods (sales fulfillment or shipping warehouse) can create demand on the manufacturing warehouse location.This can be even worse in larger companies that operate dozens of distribution centers or companies that utilize third party warehousing providers. Continue reading
Inventory Management Guidelines: Some systems (especially ERP applications designed for wholesale distributors and manufacturers) may have special maintenance screens for other parameters that could (and likely will) affect your MRP planning results. For example, Sage 500 ERP has a task called Setup Warehouse Replenishment software. This task is organized by purchase product line and warehouse to define some of the settings that are used in the MRP software. These may include reorder method (manual, EOQ, Min/Max, or Max), Buyer, Primary Vendor, Standard Lead Time, and Season Start/End dates. Some systems also allow you to define target quantities for ordering by PPL and warehouse – such as target dollar values, quantities, volume, or even by weight.
Supply Chain Management: Common MRP Mistakes How to Avoid Them
There are a list of common MRP mistakes distributors and manufacturers make. If you are a manufacturer or distributor please watch our recorded webinar to learn Supply Chain Management tips from the experts. Manufacturers and Distributors have the same problems no matter what products produced or sold: Continue reading