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WHY MRP IS SETUP LIKE IT IS:
Listed below are a few things users need to understand about why MRP is setup like it is: 

1.   Most EMS companies have small margins and need to move quickly.  If MRP waits for a planner to change a WO because they made a mistake, buyers may have already ordered excess inventory and that will hurt cash flow.  This has significant potential negatives and may result in parts that cannot be returned or used.

2.   MRP will tell them to buy/produce what and how they said they want to do it.  The whole point is to reduce the reviews and updates required by buyers and planners.  If the settings are correct, users can purchase and produce as indicated.  If they are not correct, they should be adjusted rather than trying to work around them and ignore the actions.  Most EMS companies are Make to Order.  However, standard make-to-stock should be handled with mins and safety stock, not random increases in WO qtys.

3.   Most EMS companies deal with many exceptions to the rule. This may be why they don't want to adjust settings.  If that is driving the need to build outside standard settings, we have added many checks so that they can tell MRP that they are deviating from the standard and it can ignore the specific instance. 

4.   Firm planned (FP) cannot and should not be used as a catchall for incorrect settings and has gotten many companies in trouble.  Any company that needs to use FP all the time is not setup correctly.  However, it is a perfectly acceptable and suggested method for dealing with exceptions.  If they do not use FP UNLESS it is an exception and they know about the exception, they should not have the issues he described.

5.   We have reports available to show excess inventory after all MRP demands.  

6.   Kanban can be closely simulated with min/mults and safety stock.  Once again, system settings are critical.  But, using this method, they will have enough on hand and ready to replace actual demand.

 

 
 
Article ID: 3584