Use MRP to help validate your manufacturing data.
Manufacturing organizations rely on Key Performance Indicators (KPI) to establish performance baselines and track trends, which include the impact of improvement projects. KPIs can include a range of categories, including cost, throughput speed and quality. It goes without saying that a KPI found to have come from questionable data could erode confidence in decisions made based on it.
Data validation is particularly important in manufacturing, so to prevent uncertainty before any manufacturing KPI baselines are agreed to, consider running some validation tests. One way to validate data is to predict and compare the test outcomes against expectations. Materials Requirements Planning (MRP) is a powerful planning utility that can serve a dual purpose as a platform for conducting simple or complex data validation tests using what-if scenarios.
A simple validation exercise can be done with a representative sales order. The test would involve predicting the replenishment outcomes by having MRP generate Purchase and Production orders and comparing that output to what was expected. Look closely at the details, such as an incorrect supplier UOM or lead time for a Purchased item, the wrong Bill of Material version or missing child subassemblies for Production Items. Look also at how the item base stocking quantities were maintained. If the BOMs have routings, the scope can include the Operations detail including Work Centers and Scheduling. A much more comprehensive test could involve a partial or even entire year of sales orders. Some Manufacturing software packages such as MISys Manufacturing even have a utility to assist with this.
A close alignment between MRP prediction and outcome can provide better confidence that your manufacturing KPIs are performing well. MRP has long been well established as a powerful utility for material replenishment, so its good to know that MRP can also be used to help build confidence in your data, KPI’s and business decisions…!
Matt.