On-Time Delivery for Your Company
Every manufacturer strives to ship their customer’s products on-time 100% of the time. Companies without a good ERP application struggle to come anywhere near achieving that goal.
Those using a good ERP system come much closer to achieving their 100% on-time delivery goals.
Why do companies without an ERP solution struggle? One of the key reasons is inaccurate planning. This includes both production and material planning. Let’s tackle the latter in this post.
It is impossible to build a product if you don’t have the material to do so. The lack of the correct washer can hold up a larger order frustrating your customer, stifling your cash flow, and can result in a strained relationship with your customer.
Many smaller companies try to handle the material planning aspects of their business manually. They do so using spreadsheets or sometimes even on paper.
They rely on information being manually tabulated and try to determine what material they need and when. This can often be done when you are first starting out, and volume is extremely low, but it quickly becomes overwhelming and often results in chaos and can limit your ability to grow as a company.
This is where an ERP solution comes into play. This can allow you to have a single point of data entry. In other words, you will enter your information in one place and allow the system to use that information to guide you.
As an example, a sales order is entered and can then drive your material’s manager, production manager, and/or buyer to react.
The MRP (Material Requirements Planning) aspects of the ERP system will provide the managers with actions they must perform on a timely basis in order for you to meet your customer’s requirements.
This includes ordering the item being sold as well as all of the items you need to purchase or make to produce that final product.
All of this will be based on the data in your ERP application including; on-hand inventory, allocations (items required by other orders), product on order already, and in some cases, forecast demand, safety stock, or items that have simply dipped below the re-order level you choose.
This will also take into account the dates of the requirements and product on order and will aid your managers in making this all align to ensure you have the material you need exactly when you need it.
All of this happens quickly, allowing you to continually react to changing demand ensuring that late deliveries become the extreme exception rather than the rule.
Here’s the best part, when you implement a solution like this, not only can you dramatically increase your on-time deliveries in most cases, many find they also reduce their overall product lead-times and often, reduce the amount of inventory they are carrying as a byproduct of the process.
Why? Better planning ensures you have a steady flow of the RIGHT inventory.
That it’s coming in or being completed at the time you need it. This helps break bad habits such as stocking more inventory than you need hoping to avoid not having it when you do.
It can also shorten the time it takes to get product out the door simply because you don’t find your self constantly waiting for that one or two items that were overlooked and never ordered.
Passport Software’s MRP for Small Businesses allows you to set planning rules, set lead times, and provides concise reporting.
PBS™ Manufacturing is a scalable, affordable modular solution that integrates with other modules to meet your company’s unique needs.
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