Traditional MRP – We need to talk.
Few, if any, follow recommendations of their traditional MRP system unquestioned. That gives a clue.
Few, if any, follow recommendations of their traditional MRP system unquestioned. That gives a clue.
So, as we slowly spin into chaos, we have to finally admit that trying to use a tool based on precision and exactness creates a challenge as our world becomes more and more imprecise.
I get these crazy thoughts that perhaps sometimes we are going about things the wrong way. Or maybe it is clearer to say we are starting at the wrong end. To achieve any goal, there are always at least two approaches to take. Should I start with the target and determine how it can be achieved? Or should I start with a process or behavioral change and see how much improvement I can make?
What are the things that, if we could find them, would make Supply Chain Management a whole lot easier? In fact, they are the things for which some of us search our entire careers. Have a look at my list of three. Let me know if you agree or if you have additional holy grails that you seek.
What if we could segment the precision, with built-in connectivity between the segments, rather than forcing the entire operation into a step by step linear process?
We can embrace the complexity and build a system where everyone is judged on the preciseness of their input and their output. Aligning the various complexities along the various steps of a process so that each step is exactly and precisely in line with the preceding and proceeding steps. Sound simple?
What does it mean to be over-qualified? When I was hiring people, I was always eager to find those who may one day replace me or even surpass me. Why would I want to hire someone that was only capable of meeting the current requirements?
During our phone conversation yesterday, when you asked me how long before we could ship our product to you, I went about researching the lead time for our top selling product.
Traditional MRP has become the focus of Buyers, Planners, and Schedulers with input from Sales and Customer Service and output impacting operations, shipping, and logistics.
Years ago, at one of our APICS meetings, we had a meteorologist from a local television station as our guest speaker. I figured it would be interesting, but I never figured that her first words would be like a beacon in the darkness and a goal for which I have been striving ever since.
We all can agree that having the right amount of inventory is valuable. Yet most businesses have too much of the wrong stuff and too little of the right stuff.
Demand Driven MRP results in having the right amount of inventory for strategic parts. Because it creates decoupling points that absorb the variability of the bullwhip effect, I have less surprises regarding inventory. And if I focus on having the right inventory, I can eliminate shortages by only buying the parts I need. At the same time, I can allow the excess inventory to reach its proper level.
Material Requirements Planning (MRP) has been the solution that has allowed manufacturing companies to manage their inventories and their production schedules for around 50 years.
Today, companies of all sizes and industries are solving their inventory firefighting chaos by using Demand Driven Material Requirements Planning, a method to model, plan and manage supply chains while protecting and promoting flow.
It may be common knowledge among Supply Chain Professionals, but I wonder if everyone else in most companies really understands what is going on behind the software called MRP and the complexity related to bringing all of the component parts to be in the right place, right time and right quantity.
Every argument you can give, every tweak that you perform, every data export and re-analysis that you explore that prevents MRP from failing, is exactly my point. The system doesn’t work as it is today.
First, recognize that Inventory is your leverage point. Having the right inventory in the right positions is the first step. Traditional MRP assumes that you wait for a customer order, get the required inventory (no more, no less) and after shipping, you have no inventory left.
It doesn’t matter if you’re in upper management or deep in the trenches, neither side seems to be able to see the perspective of the other. Is the gap between these positions just too great? Is one side or the other incapable? Are we attempting to achieve opposite goals? Or are we speaking different languages?
