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What are some rules you have for implementing MRP?
What have you learned to do or not to do when implementing MRP?
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2 Answers
Hi David,
1. MRP is a very data intensive activity. Bill of materials (BOM) of all products need to be prepared, and more importantly updated regularly. First task is to allocate appropriate resources to the activity.
2. You do not want every item to run through the MRP, because for engineered products with medium complexity and variety, MRP runs can take a long time. And ABC analysis needs to be done, so that the most valuable 30% items only go through the MRP
3. It is also important to do a standardization exercise, so that you eliminate SKUs that can easily be replaced by other similar items. This will help in physical stores management and consequently MRP also.
4. MRP is not only about the software, Lean manufacturing principles will also help removing the complexity of the material planning exercise. Try implementing - single piece flow, U-shaped workstations etc.
It always helps to remember that implementing good material planning systems take a lot of smart Industrial Engineering and commonsense and a lot of time. MRP is probably only 30% of the solution
Rushabh
ERPNext.com
David -
One thing I have learned after several implementations is NOT to spend much time on the financials in the initial stages. Almost every failed implementation I have seen was stuck trying to get the financials 'just right'.
Rushbah's answer is correct - it is VERY data intensive. However, the majority of that data is for operational needs - not financial. When you generate an ongoing stream of valid operational data, Accounting will have the pre-requisite data to generate valuable financials.
My advice is: 1) Enter the Chart of Accounts and whatever minimal financial data is required to make the system function accurately.
2) Focus on accurate BOM information so the system can begin working for you (rather than you working for the system).
3) Get current Customer and A/R info entered so Sales and Customer Service can use it for new Order Entry and Cash Receipts.
4) Use updated Vendor and A/P info so Purchase Orders and Checks are running through the system.
5) Once Order Entry, PO's, BOMs and A/R, A/P are working, it is time to tackle the stores of Inventory/Stock on hand. The transactions should match reality, so if it doesn't reconcile, track down unreported usage.
6) Now... Accounting can begin to utilize actual, relevant data to generate useful reports and accurate data to make business decisions.
Hope this helps!
Jim Scott
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