MRP is a powerful planning system for manufacturing enterprises, but it doesn’t always live up to its promise for many companies. Why not? There are many factors.
In this webinar, Don Lindsey explores the common reasons that MRP fails or doesn’t live up to its promise. From inadequate planning data and order dates to incorrect transaction processing to a faulty setup of modules, you’ll see how these pitfalls impact MRP.
Plus, Don reviews the basic needs of a well-run MRP process and shows you how to avoid inaccurate information in POs, Work Orders and Sales Orders. You’ll learn how to set up everything correctly—from part numbers to BOMs and date issues so you can make MRP succeed!
What are your thoughts on using Resource Planning rather than or in addition to Capacity Requirements Planning (CRP)?
Material Requirement Planning is known to be “capacity insensitive.” That is, MRP drives CRP with an infinite approach to load/capacity, with no regard for capacity and any particular work center. Finite scheduling systems, on the other hand, will only load a work center up to its defined capacity. Then, based on the scheduling rules, the system will apply the excess load to work center periods in the future that can accommodate the load.
Because of the infinite capacity issue, it is necessary to do capacity planning above MRP with Resource Requirements Planning (RRP) at the Production Planning level and Rough Cut Capacity Planning (RCCP) at the Master Production Scheduling level. When these two capacity planning tools are in place above MRP and driving the master production schedule, MRP will be much more in line with the available capacity at the detail Work Center level. In addition, CRP will be more in line with the defined capacity for the shop. As the old axiom says: a plan that exceeds capacity will not get build and will only build inventory.
What is the best way to handle MRP requirements across domains?
There is no innate solution in QAD to account for MRP across domains. MRP and DRP [QAD’s Solution for across site demand and order calculations in the same domain] does not work across domains. If you have a specific set of circumstances that you are facing with regards to MRP across domains, please contact us, and we could discuss the issues.
From your experience, do you have a top 3 gotchas?
The three major gotchas in MRP are:
1 Quantity on Hand – QOH is the starting point of the MRP calculation. An inaccurate QOH will cause the entire set of calculations to be wrong. Cycle Counting, Physical Inventory, Proper Transaction Control, and Bar Coding all contribute to accurate Quantity on Hand.2 Demand Management – Statement of Gross Requirements – The correct timing and quantities of demand are what drive MRP to calculate projected Quantity on Hand or net requirements. Proper coordination of demand is the key to the accurate calculation of the MRP netting process.
3 Order Policy – The use of the order policy codes, along with order quantity, order periods, minimum, multiple, and maximum quantity in the 1.4.7/1.4.17 menu, determine how MRP will arrive at the planned order quantity to support your gross requirement. The proper choice of order policy and associated parameters “by part number” is the most critical decision point in the MRP calculation. I have seen situations where all parts in the mrp_det tables are set to LFL. I have also seen all parts set to POQ with 7 (or other) periods and many settings in between. Experimentation with order policies and parameters by the planning organization can go a long way to understanding the resultant planned orders created by MRP. There is no correct answer. What is best for your organization is right. But, with that said, this is probably the most misunderstood set of parameters by far in MRP implementations.
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