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Issue 332008
Here it is, the first issue of the ManEx Minute Case Study Newsletter!
For this issue, we address communicating MRP demands with suppliers. This is a common question we receive and a concern for nearly everyone in the industry. Hopefully this issue will present ideas you hadn't considered and will help you make things more efficient.
We can't list every option available, but we try to cover the most common and useful. However, if we missed one, please let us know and we will post the best ideas in the newsletter archive.
As always, We look forward to your participation and feedback as you gain new insights and become a more effective provider of Electronic Manufacturing Services.
Sincerely,
David Sharp
ManEx, Inc.
Business Case - Material Requirements Planning
Communicating MRP Demands
As with most EMS companies, North Eastern Company* (N.E. Company) is working to maintain and grow the business while managing the peaks and valleys common to the industry. This constant fluctuation makes planning a challenge. How can they effectively satisfy demands in the peaks, without going bankrupt in the valleys?
Recently, N.E. Company has seen a significant increase in orders and frequency. While these changes affect the entire company, the first impact is felt in purchasing. These rapid changes make it difficult for buyers to effectively communicate with suppliers in a timely manner. They either spend an inordinate amount of time updating suppliers on the frequent changes, or they miss some of the changes and have excess inventory, or component and production delays.
As work load increases, how are buyers supposed to maintain this communication while completing their other tasks? And, how will changes impact performance and the bottom line during the next valley?
Management must either higher more buyers to stay on top of the frequent changes, and/or find a way to make their current staff more efficient. But, what is the best way to do this, and what will it take?
Business Case Solutions
- More Resources - All too often, companies decide to throw more resources at the "temporary" problem further reducing their already tight profit margin. More people completing the purchasing process does NOT increase productivity and actually increases the likelihood of human error and production delays. While this might work for a little while, it is neither ideal, nor a viable long-term solution.
- EDI/XML - EDI and XML are communication methods allowing disparate systems to "talk" with each other. Creating this connection between the systems can be very time consuming, especially if one or both systems does not have this capability built-in. However, if the volume is high enough and the relationship will last long enough, this type of communication is an effective way to allow the different systems to communicate reducing the work load and opportunities for error.
- Remote Access - For the most trusted suppliers, giving them direct access to specific parts of the system may be the simplest way to give them visibility of changes in upcoming demand. However, special care should be taken to ensure that they only have read-only access to specific sections. Make sure your system will allow this type of user control before granting access.
- Automated Status Updates - This is a fairly broad option because the method of execution can vary widely from company to company and from system to system. However, any method that would easily allow the system to automatically update each supplier (regardless of EDI/XML capabilities) would qualify. This can be as easy as periodic emails generated by the system or reports suppliers can run at their convenience. Regardless of the method, buyers no longer have to manage each and every part number to ensure it will be delivered according to demands and can instead focus on exceptions and non-standard parts.
* Company name has been changed.
ManEx Case Solution
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