2 reasons that make ERP unusable for production plans
Generally, the company ERP provides an MRP module for production planning that has been developed and sold by those who do not prepare production plans on a daily basis and purchased by those who never use it: the company’s IT department. There are mainly two reasons that induce planners to overcome the limits of ERP and to seek alternative or at least complementary solutions to allow an adequate production flow to respect deliveries to customers: the difficulty in recognizing the feasibility of orders and the dating of the same, and consequently of customer orders, at finite capacity.
A plan is a plan if it is feasible, otherwise it is a wish list
In manufacturing companies of a certain complexity, the planning system can propose thousands of new production orders over the time horizon. Some of these must be released in the department quickly to avoid delivery delays to customers and it is essential that the department is certain that these are feasible orders, that is, have components available. Otherwise we are not dealing with a production plan but with a wish list submitted to production, which in turn should skim off the feasible orders and monitor the feasibility of the other ones along time. Understanding which orders are feasible and which components should be solicited with the MRP module of the ERP is a difficult task: either we analyze the proposals one by one with the availability of their components or we try to re-elaborate the MRP output on a spreadsheet coarse method. Looking for the solution is even more frustrating if you think that with each new planning session you have to deal with new customer orders and production proposals that can call into question what was verified and decided in the previous session.
Resources have limited production capacity
The other reason that makes a production plan proposed by ERP unusable as it is is that it considers only some production resources and considers them to have infinite capacity. That is, it does not take into account the fact that:
- several orders cannot be carried out simultaneously on a certain machine: that is, the resource actually works at finite capacity
- an order is feasible at a certain date if the orders of its components are also likely to be feasible in time
It can be done
The solution to both limits of ERPs is to adopt adequate tools, capable of:
- simultaneously elaborate all the constraints relevant to the production plan (machines, personnel and equipment with finite capacity, sequencing rules),
- allow to preserve what has already been decided by the planner in previous sessions,
- propose an output for immediate consultation regarding feasible orders and full of significant details (distinction between feasible, not feasible, feasible orders for partial quantities or which only require a transfer of components between warehouses to be feasible, etc.)
APS are generally the most suitable tools to overcome the limits of ERPs in the context of production planning but even among them the characteristics are different and the flexibility in managing the particularities of the company is not always guaranteed. Also for this reason Cowry is often called upon to replace previous APS in the company.