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.

It’s all about Lead Time

Lead time is arguably the most important factor in manufacturing and distribution. To a great extent, it determines how you set up your business, what inventory you carry and where/why, what you can offer to your customers, and how agile and responsive you can be to changing conditions and changing demand.

Demand Driven MRP

In today’s volatile, globally competitive environment, new decision-making tools are required to monitor, measure, and improve total organizational performance. Demand Driven Material Requirements Planning is a pull methodology to plan inventories and materials.

Sales forecasting time is here again

Companies that don’t do a detailed forecast are greatly limiting their ability to marshal their resources to meet customer demand effectively. They will likely be caught with too little or too much inventory at some point, the need for expediting or overtime, and some disappointed customers and lost sales.

1 2 3 10