How can you ensure accurate MRP inputs?

Don’t forget data cleansing! When updating BOMs it’s common to leave old PNs creating issues when MRP runs. If old PN are not changed or deleted it, MRP will reflect the demand on the old PN and not on the correct one !

Material Requirements Planning (MRP) is a crucial component of production and inventory management, and accurate input is essential to ensure its effectiveness. Here are some key steps to ensure accurate MRP input: Accurate Master Data: Ensure that master data, including item codes, bills of materials (BOM), and routing information, is accurate and up-to-date. Regularly review and update item attributes such as lead times, safety stock levels, and order policies. Bill of Materials (BOM) Accuracy: Maintain accurate and current BOMs for all products. Verify that BOMs include all necessary components and reflect the correct quantities and relationships. Inventory Accuracy: Regularly reconcile physical inventory

Product structure (BOM) is one of three required inputs for MRP to perform its equation. Big picture advice - get your engineers and operations people on the same page about product structure! Striving for commonality in components and materials as much as possible will give you less to review and fewer errors. It will also allow you to better leverage the matrix BOM. Properly leveraging a matrix BOM can have a HUGE effect on operational performance! You may want to consider reading Chapter 3 of the new Orlicky 4 book for more information about BOMs.

I have run into this problem at 5 different companies. It is essential to: 1: Have a gated process for the release of BOMs. The BOMs need to be 'clean' before they are released to procurement and planning. 2: There should be a BOM review process involving both engineering and planning. 3: BOM defects (i.e., missing components, wrong quantities, wrong P/Ns called out, etc.) need to be tracked on the receiving end (planning and procurement) so that this information can be fed back to engineering for root cause analysis - and implementing whatever the fixes are.

Accurate and up to date BOMs inside the system are critical for the MRP calculator to consider current and future materials needs. It is important as well to have constant feedback with the operations department to ensure that expected usage of materials is consistent with technical standards considered at the time BOMs were created.

In managing my company's inventory, my emphasis is on registering all items in the system and keeping it as organized as possible. However, it's natural that some discrepancies occur. In this regard, Pareto analysis allows me to make manual adjustments to low-volume and low-value-added items. However, when there are discrepancies in significant items, I make it a point to conduct root cause analysis to prevent long-term financial losses.

Implement Inventory Record Accuracy metrics in the warehouse, just like cyclic counts and wall-to-wall counts based on IRA performance. Digitize as much as possible all of the inventory touchpoints, to ensure systemic and physical consistency, and to track and locate inventory at all times.

Apart from BOM and demand numbers, the last piece of puzzle completing robust MRP calculation is accurate inventory data. Incorrect inventory data can cause major mistakes in determining how much and when to purchase raw materials, resulting in potentially unused materials (=costs). In the other side, out of stock situation can also happen, resulting in machine stoppage (=costs). Automated data input (RFID/barcodes) is good to reduce data inaccuracies. Physical inventory audit can be done in quarterly basis to add more into data reliability.

Maintaining accurate inventory means the organization follows best practices in all the Material Handling activities. Accurate inventory will help avoid accumulating unnecessary inventory or ending up with a shortage of required materials. Along with the regular material handling practices, a robust cycle counting process regularly will help not only to ensure inventory accuracy but also to resolve the issues in the processes.

An accurate inventory record is critical in ensuring that the data being reviewed gives an honest account of the demand and supply information. This will improve on forecast accuracy and advise on the planning cycles as well.

MPS is running for Independent demand items, the demand directly from the Market and Customers as Forecasts or Sales Orders. In the forecast, the planning horizon and planning buckets (Daily, Weekly, Monthly) must be based on the Cumulative lead time of the Materials. Too long a horizon will make the system rigid and volatile. Too short a horizon will end up rushing materials. Big timely buckets will lead to big lot-size production/purchase that will affect the flexibility and lead to obsolete inventory. Small bucket sizes may lead to an increase in the cost. Balancing the Lot Size and Cost is Key. Educate the customers to give realistic Requested Date. Compare the Requested Date Vs ATP Vs Actual delivery date to improve MPS.

Master data HAS to be vigorously maintained to produce a value add MRP output. In addition, a single point of planning (created by your BOMs) is vital. Using a FG pull system, non planned items, must have elasticity built into the supply allowing for unplanned variations to the production plan. Lastly, an ongoing life cycle/obsolescence process must be in place with marketing and sales to continuously drive out excess and obsolete materials.

Aligning master production schedule with MRP inputs ensures that production plans are synchronized with material requirements. This coordination helps optimize production efficiency and minimize delays.

Rules before tools! This is where there is a general disconnect in a LOT of companies. Most of the planning parameters are a function of organizational policies, many of which are well outside the control of the people working with the MRP system. The people making the policies often don't see or understand the implications of those policies when the system runs (or attempts to run). And then we wonder why everyone is working with spreadsheets outside the system. There are two obsessions to tackle here and they are not trivial. 1) striving for the lowest unit cost and 2) the quest to be precise. If you are chasing these two things in the VUCA World you are on a Quixotic adventure.

My last experience, while studying the most updated strategies to match variability, planning adapatability, supply and supplier chain management, is again a surprise. Customer demand inputs directly Master Plan, MRP runs without filters, fences or other agreed rules. Material Planning try respond to every change in the weekly plan. Inventory pile up at suppliers, slow or no moving because phase out-phase unmanaged. Production lines transform amazingly in flexible (really positive) configuration. This is the new normality. All the rest of external resources (suppliers) have to adapt. That's reality.

Setting up valid, tested and updated planning parameters is crucial to ensure your MRP outputs. - Have a quarterly or bi-annual review of your reorder points after reviewing your lead times and horizons. - Keep close to the changing logistical landscape that impacts your MRP inputs and update accordingly.

1.Manufacturing Engineering: routing and BOM are varified and updated 2. Purchasing: Purchasing Info are fully updated 3. Planning: forecast and planning info are updated

Regularly validate and adjust planning parameters such as lead times, reorder points, and safety stock levels. This ensures that MRP calculations accurately reflect real-world dynamics and variability, leading to more reliable inventory management.

Many users follow the practices that were told by predecessors or superiors without understanding the basic MRP concepts. Had they known the concepts with proper training, there is a high possibility that they could contribute much better to Material Availability and Customer Service through proper MRP. Some robust ERPs have excellent tools for MRP analysis, Exception analysis, and Material Coverage analysis. However many users are unaware of these tools and do a lot of Excel activities with the most complicated logics and formulae. With the same effort they put into the system's MRP analysis, they can contribute to excellent customer service and profitability.

I would suggest using screen recording software like TechSmith's Camtasia to record process steps in the MRP/ERP system. A bit similar to using YouTube to learn how to fix things around the house.

In my experience , in order to ensure accurate MRP inputs, it's crucial to maintain a disciplined approach in data management. Regularly update and verify inventory levels, lead times, and supplier information. Establish clear communication channels with relevant departments to gather accurate demand forecasts and production schedules. Implement robust quality control measures to validate the correctness of input data. Regularly review and adjust parameters such as safety stock levels and reorder points based on changing business conditions. Continuous training for the team involved in MRP data entry is also essential to enhance accuracy and prevent errors.

Always remember that MRP is a calculator that was built to be precise. Precise timing and precise quantities based on a single given demand number at a higher level. You have a choice; you can chase the precision by constantly scrubbing your MRP inputs and looking for a better way to predict the future or you can try DDMRP which is designed to work in ranges of capability. Working within ranges helps reduce the unavoidable noise of and constant efforts associated with the imprecision that is inherent in conventional MRP.

MRP is considered a Magic Wand that can handle the requirements and ensure the availability of materials in the right composition. To bring the desired result from MRP, the concepts of MRP and impact of every MRP parameter should be understood. Don't go for a complex system. Think simple but effective. There must be some prerequisites ensured like (1) Fixing the Frozen period, Slushy period, and Liquid period to handle the changes, (2)Right MRP procedure like BOM exploded planning or Reorder Planning, etc. (3) Accuracy of MRP parameters like Lot Size, Safety stock, Lead time, etc. (4) Inventory accuracy, (5) Whatever we do, there will be always exceptions and equip the team to handle them and find ways to overcome them, etc.

For acurate production inputs one should automate the scan points. By using 2D or bar codes on the parts and mounted scanners that the product passes under, the data input will be correct and real time every time. Data input and intergrity on the planning and system setting is rarely done correctly as it requires a deep understanding of the manufacturing and financial goals for tracking and reporting.

Make sure all the MRP data fields on the material master are maintained correctly. As a good practise revise these parameter s periodically and update it if necessary. MRP results can be greatly improved by aligning data fields and setting up expectations accordingly.