Improve your order flow - Moving MRP to the front of the class!

Traditionally, MRP (Material Requirements Planning) is a tool that’s been relegated to the back of the class. As a tool that must be regenerated periodically to get the latest recommendations, it provides order actions that are accurate at the time of generation. To get additional recommendations, you must regenerate your material plan.

Though this can be done more frequently, the typical MRP user will regenerate their MRP only once per week. This means your order actions are waiting an entire week before being executed.

In the upcoming release of PBS Manufacturing V12.04, we’re moving some of the key MRP functions to the front of the class for companies using the Master Scheduling and MRP module. This will allow you to act on your manufacturing needs far faster resulting in quicker deliveries to your customers.

There are two key areas that are directly affected:

Sales Order Entry

When entering a new sales order for a manufactured product, PBS Manufacturing has always allowed you to optionally create a shop order to produce the product to satisfy your customer’s needs. This new addition will take this process further than ever before. First, it determines whether or not you have enough “supply” to satisfy the need. Specifically, it’s looking at on-hand inventory, open requirements for that inventory, and finally, it’s taking open shop orders to make the product into account. It determines if you have sufficient inventory on hand or on order to satisfy the need. If so, there will be no recommendation made to order additional inventory.

In the event you don’t have enough inventory available to satisfy this new requirement, in addition to the existing requirements, the program will proceed to compute a recommended quantity to order. This accounts for the unsatisfied amount on this new order, any other unsatisfied requirements in the system, and then applies the MRP rules you’ve defined in the item master record. These rules include order minimum, order multiple and even safety stock. In other words, your MRP computation is being done on the fly and a recommended quantity will be provided for you in the create shop order function automatically!

This means you’re not only going to satisfy your immediate need for this customer, but will also account for any other open demand not currently being satisfied with existing supply. MRP has just moved to the foremost part of your system, sales order entry, which will allow you to react faster than ever before!

Shop Order Explosion

If you produce items that have one or more sub-assemblies, PBS Manufacturing has always provided you with an option to perform what’s called a multi-level explosion on a new shop order. The process was reasonably intelligent in so much as when it encounters the need for a sub-assembly, it would check inventory to see if there was sufficient stock on hand to satisfy the need. If not, it would create a shop order to produce the sub-assembly automatically and then automatically schedule it to be due in time to meet the parent order’s demand.

We later added the ability to apply two of the MRP rules from the item master; order minimum and order multiple. This added a new level of intelligence to the sub-assembly planning and scheduling process.

In V12.04, for users who use MRP, we take this to a whole new level of automation. Much like the sales order entry, it will first determine whether or not you need to order more material. Unlike earlier releases, this also accounts for existing shop orders you may already have scheduled in your system. In other words, it is doing exactly what MRP would, determining whether or not an order is needed to satisfy your demand. If it’s determined an order is needed, it will determine the amount needed, and then once again apply your MRP rules to the process. This means it will apply your order minimum, order multiple, and even account for safety stock when making a final determination of how much of the sub-assembly needs to be produced. This means you will be accommodating for all supply and demand during the explosion process, once again moving your MRP function up to an immediate action rather than an afterthought.

If you opt to use both of the above new features, you will be making faster, more automated decisions, that provide you with immediate results. The MRP will still be run periodically as the only thing not managed automatically is rescheduling of existing orders and ordering of purchased goods. The number of new production order actions should go down dramatically. Assuming you’ve defined your rules carefully, you should end up with less extraneous inventory being ordered as well. That can result in less inventory while increasing your turnaround time on manufactured goods.

If you’re an existing PBS Manufacturing user and aren’t currently using the Master Scheduling and MRP module, V12.04 should make you reconsider that. If you’re not using PBS Manufacturing at all and find yourself constantly behind the eight ball when it comes to satisfying your customer’s needs, it’s time to make the move! Find out how easy it is here.

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