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Evo-ERP and DBA Classic >> Manufacturing >> Driving MRP
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Message started by Lisa_Jones on 10/29/04 at 16:36:36

Title: Driving MRP
Post by Lisa_Jones on 10/29/04 at 16:36:36

We are trying to make our MRP as accurate as possible to control rising inventory costs. To make sure we understand how it works- what is the relationship among Forecast and Work Orders as they relate to MRP. Do both Drive MRP, do workorders replace the sales forecast or add to the need for :-/

Title: Re: Driving MRP
Post by aricon on 10/29/04 at 17:05:13

Work Orders, Sales Orders, and inventory shortages "drive" MRP. Forecasted demand optionally can be added to the requirements to provide a more comprehensive picture of real AND projected requirements.

Title: Re: Driving MRP
Post by Lisa_Jones on 11/01/04 at 15:13:09

Thanks- but then how does the forecast affect the other three- does it increase the total demand for parts or do the work orders satisfy the demand from forecast and sales orders?

Title: Re: Driving MRP
Post by aricon on 11/01/04 at 18:26:06

No, WOs can ONLY satisfy actual demand (ie. Sales Orders). Forecasted requirements simply adds to the total demand over a time period and PLANNED ORDERS are used to "fulfill" that anticipated demand. Forecasted orders can also have a relationship with planned POs to fulfill the purchased components demands.

Title: Re: Driving MRP
Post by Tim Keating on 11/02/04 at 14:40:55

I think I know what you are struggling with because we deal with a similar issue. You are sitting on a "good" forecast but also have some orders in your system. You might think that those "hard" orders should be subtracted from the forcast during MRP.

As Lorne said above, they won't be subtracted - they will just lay on top of the forecast. So if you have forecasted selling 1000 of Item #1234 in your forecast period but a customer has already placed on order for 500 that you haven't shipped yet, MRP will be driven by 1500 pieces and you will probably over-order components.

When we run our first pass on MRP, we drive it by forecast only and ignore sales orders, so we are assuming our forecast is accurate. We review open orders and tweak our forecast accordingly.

Title: Re: Driving MRP
Post by Lynn Pantic on 11/02/04 at 16:12:36

That is the purpose of the Consume Forecast program option in MR-C. It will reduce the Forecast by the quantity of Sales Orders for a given month and flag the Sales Order lines as having been consumed so if you run the Consume Forecast again, it will not reduce the forecast a second time for the same sales order.

Title: Re: Driving MRP
Post by Tim Keating on 11/03/04 at 09:55:50

I will try that out.