Do these terms sound familiar, expedite, and defer, damper and cancel? If so you’re most likely a Material Planner or Master Scheduler. If that is the case you’re well aware of the nervousness of MRP systems.
Most of the time it’s blamed on moving customers schedules however that really not the case. I’ve found the greatest numbers of issues are caused by sloppy system management.
For example there is a MRP message to order Widget 123 so you create the purchase order. The next day MRP generates a cancel message for Widget 123. What happened? Looking closer we found Marketing needed a show and tell part and Storeroom Clerk used a unplanned transaction to remove from stock which generated an order message. You guessed it marketing returned the part the next day and once returned to stock MRP no longer required purchase order and generated cancel message. This is just one of many internal issues that can cause havoc in your planning system. Below are my top five internal reasons for MRP nervousness.
1. Properly Manage Safety Stock
Don’t add safety stock into the ERP system (part master planning field) before its available. If you need 25 widgets and want to keep safety stock of 10 the initial order should be 35pcs to lead-time. Putting in a safety stock number in ERP prior to having it generates needless overdue message throughout the bill of material. Once the needed parts plus safety value arrive is the proper time to add value to ERP planning field. Be careful not to have safety stock at multiple levels of the bill of material this can generate unnecessary inventory.
2. Properly Control Unplanned Withdrawal
Unplanned transactions can create havoc throughout the MRP system. Storeroom Clerks should be well trained not only in product distribution but MRP in general. All unplanned transactions including cycle count adjustments should be reviewed by Material Planners ideally before the next MRP regeneration.
3. Make Timely Stock Transactions
It’s not uncommon for Storeroom Clerk to get busy and hold and batch receipts and issues transactions. This can be especially troublesome when working with reorder points and just in time replenishment parts. If not done immediately transactions should be performed before next MRP regeneration. Also disposition of non-conforming product should be completed promptly. A system full of aging and partially delivered work orders is a recipe for disaster. Until you code otherwise MRP assume product is conforming and useable but we all know better
4. Spare Part Demand
Spare part demand should be forecasted an entered to lead time sounds obvious but we all know this gets overlooked regularly.
5. Schedule Changes
Typically in manufacturing environments reviewing and changing schedules daily to match customer demand is futile and non-value added. Flowing down your customer’s nervous MRP is lazy and unprofessional. The plan that changes daily can no longer be considered a plan it’s simply a flow down of chaos. Work to level load your forecast and smooth the production. Negotiate schedule freeze periods with your customer. During that period the schedule is locked and cannot be changed without mutual agreement. Unless a major change has occurred don’t update master schedule more than twice a month (I recommend once a month). Most importantly remember MRP in all its complexity is only providing you information calculated from information inputted from users. Garbage in garbage out.
Do you have any tips or stories to share? Please leave a comment.