Are you using spreadsheets for manufacturing demand planning because you find them easier to use than your ERP system? The goal of every manufacturer is to get more supply and demand control by optimizing inventory levels. To accomplish this goal, most successful manufacturers agree that ERP technology is essential. What is ERP technology? Enterprise Resource Planning (ERP) refers to a total business management solution that integrates data for all operations and processes allowing for automation, mobile access, and more. Today most small to mid-sized manufacturers rely on ERP solutions and sometimes MRP to optimize inventory levels. Explore more about MRP automation best practices in further detail below:
Modern manufacturing: spreadsheets vs. MRP and Kanban
About a decade ago, The Aberdeen Group studied the percentage of manufacturers using spreadsheets for demand planning vs. MRP or other automated tools. The overwhelming majority (71%) used spreadsheets because they found it easier than using the tools in their ERP system.
"Unfortunately, not much has changed since then," says Mark Skinner, Director of Services at Clients First. "When we talk with new clients, we almost always hear something about how frustrations with their ERP systems have driven them back to the spreadsheets they were using before the system was implemented."
In addition, resource planning is a collaborative effort, or at the very least, one which requires data aggregation from several sources. When everyone involved is working from their version of the master plan, the data is often inaccurate or out of date. "Spreadsheets can facilitate decision making, and that includes poor decision making," adds Skinner.
Automating Resource Management
Automating resource and demand management processes can go a long way toward helping the manufacturer become lean and nimble. Since automation makes the process more efficient, inventory managers are enabled to focus on other priorities.
For example, two of the most popular inventory management techniques today are MRP (Material Requirements Planning) and Kanban.
MRP and Kanban explained in simple terms
Material Requirements Planning (MRP) - A production planning and inventory control system that uses bills of material, inventory data, and the master production schedule to calculate requirements for materials.
Kanban - A visual replenishment system that uses manual inventory signals to trigger replenishment. MRP is often categorized as a push-based system because it is historically created from a production plan that is created from a forecast. Conversely, Kanban is typically classified as a pull-based system because it is a key component of lean manufacturing, which heavily emphasizes pull techniques. In reality, MRP and Kanban can be either push or pull, especially when implemented within a modern ERP system like Microsoft Dynamics 365.
Download this whitepaper by Clients First Business Solutions' manufacturing experts to learn more: THE ROI OF MRP: HOW ERP TECHNOLOGY CAN HELP MANUFACTURERS SAVE MILLIONS
The Clients First Difference
Industry expertise and experience – Clients First consultants have direct experience in the industries we support. The Clients First Texas office is known for its vertical expertise in manufacturing, job shops, and maintenance, repair, and overhaul (MRO) for aviation or heavy equipment organizations. We have customers in other industries, too, including make-to-order/engineering job shops, project manufacturing, field services, and wholesale distribution.
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Please contact us for a free evaluation of your current manufacturing operation. If it’s a good fit, we’ll work with you on a plan to implement Dynamics 365 Finance and Supply Chain or Dynamics Business Central to improve your bottom line.
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