Managing Master Data and Exceptions with MRP
I recently conducted an online seminar called "Surviving Supply Chain Optimization - Intelligent Demand Segmentation is a key dynamic". The purpose of this seminar and the previous blog I wrote with the same title was to emphasize the importance of supply chain integration in managing performance and inventory levels. The key to this success is the balance between Service Levels, Inventory, and Operational Cost.
MRP efficacy and making certain that human action is in concurrence with the business regulations properly and accurately integrated in the master data is essential for accomplishment. This is because of the fact that:
- Businesses are constantly dealing with the challenge of equalizing supply and demand in the supply chain
- Although MRP is a great tool for reaching this balance, it is often not utilized correctly.
- Poorly handled data accuracy and inconsistent master data rules act as weak components that need to be managed and taken care of.
- Companies have yet to recognize that companies that focus on exceptions are successful because of their ability to manage the causes of integration failure throughout the supply chain.
The purpose of MRP is to ensure that necessary components are available when needed, either for internal operations or to fulfill customer orders. This leads to increased business value in the form of:
- Ensuring tasks are finished in a timely manner
- Reducing expenditures and capital utilization by obtaining the necessary materials when needed
The system must be kept track of stocks, demand, and supply in order to effectively compute:
- What is necessary to acquire/create
- The timeline in which they must be obtained/constructed and
- The quantity that needs to be obtained/crafted
In the years to come, S4Hana will offer advanced material requirements planning (MRP) functions, such as:
Enhancing Results from an MRP Run:
- Achieving Improvement in Performance
- Depending on the situation 10 times quicker
- Fresh frameworks to facilitate acquisition and in-house manufacturing,
- Delivery timetables, and adjustable materials.
The traditional system for capacity organization and termination
The ability to conduct a MRP Analysis
An analysis of the system can be done to monitor the circulation of materials in a timely manner and determine:
- Interrupted material flow
- Impact of the problem encountered
- Proposals for decision making aid
- Recommendations for rectification
- Role-specific KPI-guided access
The necessity of accurate data, appropriate MRP rules and uniform action in terms of implementation is paramount in order to avoid greater issues than we are currently facing. In order to take full advantage of MRP …Therefore, if we aim to enhance service levels, reduce stock and operate efficient processes that will be in line with the company's objectives, attention must be devoted to:
- Ensuring that the data in the system is reliable
- Making sure that the MRP Control Parameters have been properly configured
- Verifying the exactness of the business regulations that have been established - the master data
- Having confidence in the system to carry out its task
- Carrying out the plans suggested without questioning them
- Guaranteeing that there is business harmony throughout the supply chain - The Plan - The Schedule - The Real
- Overseeing the disintegration of the Supply Chain through efficient exception handling
Effectively Handling Data in the Consolidated Supply Chain
For efficient data management within an integrated supply chain, it is essential to move away from separate functions and promote a unified approach that acknowledges and grasps the relationship between functions and processes. In order to reach this conclusion, the following is necessary:
- Every participant in the supply chain realizes their reliance on an exact plan
- All parties are in agreement to any modifications to the schedule
- Notifications of adjustments are sent out promptly
- Exception monitors are utilized to warn the applicable departments
- Those responsible members act right away - PAT2
- For dependable data, people mustn't create their own separate systems
- Data must be accurate and current in both master and process form
- Poor data should be remedied as part of a data integrity emphasis as this is the origin of expensive individual functions.
A lot of focus must be put into constructing a company that is not the norm, where processes are aligned and the end result is integrated. Generally speaking, data within a company is constantly being moved from one department to another, and this transfer is based on the planning, scheduling, and realization of the product being manufactured in the supply chain. The issue is that the data must migrate from one area to the other with no problems and in a timely manner to avoid any issues. Outcome from polling during the online seminar During the online seminar, 85 people were asked 4 questions. Here are the results:
- Is there a high level of trust in the MRP results from SAP? 75% of companies reported yes, and 25% said no.
- This implies that the majority of businesses feel their forecasting is accurate and should have the right amount of inventory.
- However, the 25% of companies who replied negatively may have too much inventory due to manual overrides.
- Are companies using MRP effectively to balance the supply chain? 71% said yes, and 29% said no.
- This figure is slightly lower than before, however it still suggests the results are being executed correctly.
- The nearly 30% who said no could be due to ongoing fixes and manual workarounds, and a lack of understanding of MRP.
- Are organizations making changes to master data in order to keep the material's business rules relevant? 61% said yes and 39% said no.
- The majority of companies are making changes, but the 39% who said no is a notable decrease.
- In order to use the system effectively, it is necessary to take a closer look at the issue.
- The fact that almost 40% of organizations do not manage master data effectively speaks to the need to address ownership, accountability and understanding of what the data does, and how it is used. This is a central focus in any Reveal oVo® project.
Do you take advantage of the MRP exceptions in SAP to identify the origins of processes? 25% responded affirmatively while the remaining 75% answered in the negative.
- It was unexpected to see such a large change given the earlier reactions
- It would be astonishing to put in effort to maintain master data, utilize the MRP results to control the end-to-end supply chain, and then neglect to exercise exception management.
The poll, although conducted with a small sample of attendees of an online seminar, does suggest that there is need for improvement in the area of supply chain management. Watch the Webinar, You did what?! Best practices to align human behavior with business rules (dynamic MRP master data).My colleague provided a two-part blog series called "Drive Value in Your Supply Chain Optimization with a Smart Use of KPIs", which offers more insight into how to optimize your supply chain to reach your objective. T - Process Aligned Teams is a key organization structure to drive behavior change using data as fuel.