I would make certain that everyone that has input into the MRP data is fully
trained on the impact of their data. I'd also especially educate the
executive management on the potential impact of turning on MRP.
When you begin to use MRP inventory ALWAYS increases (assuming that the
reason for using MRP is to improve the availability of parts to meet demand)
as the improvements will first require purchase or manufacturing of material
that is below demand levels and simultaneously the current on hand balance
for material that exceeds demand will not be utilized as fast. If
management does not understand this fact of MRP "life", they will be in for
a rude shock and will immediately begin to question why MRP.
All of the data means ALL of the data must be accurate and under control.
Inventory On hand Balances should be 95%+.
Note that there is no such thing as 100% accurate for all parts all the
time. The small error of +/- 5% is generally acceptable as an overall
number. Obviously if you have extremely expensive parts the accuracy should
be higher. For example, if your manufacturing PC motherboards the INTEL or
AMD Chips are so valuable that a small error in accuracy and very quickly
result in a very large inventory problem.
Demand must be 100% accurate.
Demand is the open orders backlog. Demand is the forecast. Demand is the
Open manufacturing orders that supply sub-assemblies and components.
Keeping the open orders backlog and the open manufacturing orders accurate
is work. By accurate I mean quantities and dates. MRP does not know what
to do with past due demand. After all, how can I produce something
yesterday? If your companies habit is to always be "somewhat late", there
will be hell to pay when MRP is turned on.
When I talk about forecast being accurate, it is a bit of an oxymoron.
After all, we all know that all forecasts are wrong. The most common
mistake as a result of this is to NOT forecast at all. There is NO such
thing as an un-forecastable market. Don't every let anyone tell you
But the forecast I'm talking about is not the sales goals are targets. It
is a systematic method of using systems to generate demand and using that
demand as input into the MRP plan. The most important thing about a
production forecast is not that it is 100% accurate, but that it is 100%
accurate to the PLANNED INACURACIES in the forecast. If your company uses a
systemic approach to forecasting for production then you will have a range
of deviation from the forecasts that can be used. For example, if your
forecast method is to ask each sales rep to submit their next quarters
pipeline, and each sales rep does more than to stick their thump in the air
and guess, then you will get a consistent range of forecast error. Your
forecast can be 10% over one month, 5% under the next, 10% under the next
and 25% over the next.etc. etc. What you want to know is the standard
deviation from forecast. And you plan for the overages. This is used as
the formula to calculate safety stock. It is knowing this deviation that
needs to be accurate, and the safety stock levels needed to meet the "error
rate of the forecast when the forecast is exceeded".
Planned Lead Times must be 100% accurate.
This means all lead time for purchased goods and also for manufacturing
orders. XA provides excellent feedback on actual to planned so that these
can be adjusted as needed.
Bills of Material must be 100% accurate.
If you don't have good engineering change control in place, don't start MRP.
It should be unacceptable, as a general practice, to be making changes to
components after orders are released to production.
Finally, here is the real test question as to whether you are "ready" for
Do you trust the system enough to allow it to automatically, electronically
order material from your vendors DURING the MRP run? If not, find out why
and fix it.
Hope this helps.
From: mapics-l-bounces@xxxxxxxxxxxx [mailto:mapics-l-bounces@xxxxxxxxxxxx]
On Behalf Of Teresa Biby
Sent: Thursday, April 10, 2008 5:44 AM
To: MAPICS ERP System Discussion
Subject: [MAPICS-L] MRP
We are about to turn on the MRP module in Mapics. I was hoping you
experts could give some advice on what you would do differently if you
could start from scratch, any pointers on how to set up items, work
centers, buyers, planners, etc.
We are currently at Release 6 but will be turning this on with a Release
7 upgrade within the next 6 weeks (plan). Essentials w/EPDM-we are
using Mapics Browser-soon to be PowerLink.
I realize this is a really broad question, any ideas are appreciated.
Our company (one company), one uncontrolled warehouse. We have 3
distinct departments for production and buying. GL is set up with the
departments as 1000, 2000 and 3000. We have less than 30 workcenters,
one buyer-one planner for each dept.
We are about 50% make to stock and 50% engineer to order.
Thanks in advance!
Virginia Panel Corporation
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