Being Demand Driven in an MRP world

MRP (Material Requirements Planning) is not as responsive or efficient as we’d like it to be. A new approach takes the best features of MRP and adds on lean and constraint-based features to make it more demand-driven and more effective for today’s manufacturing challenges.

Reconsidering Inventory Rationale

Dropping inventory below the optimum amount causes shortages, whereas holding more inventory than necessary will result in waste. The main reason for keeping inventory is to save time, so lowering it will adversely affect the condition that the inventory is there to manage. You should go back to why you made those decisions in the first place.

We don’t manage inventory

Despite the focus on inventory (check out Dave’s article “Inventory errors cause revenue losses”), we as operations managers, do not actually manage inventory. We manage production, resources, sales, etc. Inventory is a visible measurement of the success of our efforts.

Set It to Automatic

It is generally accepted that inventory records should be at least 95-to-98 percent accurate in order to enable successful enterprise resources planning and provide good customer service. But your information system and the plans, recommendations, and alerts it gives you are only as good as your data. While many companies are able to achieve and maintain inventory accuracy, many more continue to struggle.

Manufacturers rely on ERP Software

ERP has continued to evolve, encompassing more of the business and extending through the supply chain to become the primary vehicle for coordinating activities with suppliers and distributors as well as driving the efficient operations that make up the world of commerce in the 21st century.

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