{"id":814,"date":"2017-10-31T10:52:18","date_gmt":"2017-10-31T10:52:18","guid":{"rendered":"https:\/\/www.mrpeasy.com\/blog\/?p=814"},"modified":"2022-11-30T11:42:12","modified_gmt":"2022-11-30T11:42:12","slug":"mrp-system-2","status":"publish","type":"post","link":"https:\/\/www.mrpeasy.com\/blog\/mrp-system-2\/","title":{"rendered":"MRP System Series #4: How Much Detail to Input into the MRP System?"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img loading=\"lazy\" decoding=\"async\" width=\"820\" height=\"550\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2017\/10\/Bus_wrapped_with_SAP_Big_Data_820.jpg\" alt=\"MRP System\" class=\"wp-image-819\" srcset=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2017\/10\/Bus_wrapped_with_SAP_Big_Data_820.jpg 820w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2017\/10\/Bus_wrapped_with_SAP_Big_Data_820-300x201.jpg 300w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2017\/10\/Bus_wrapped_with_SAP_Big_Data_820-768x515.jpg 768w\" sizes=\"auto, (max-width: 820px) 100vw, 820px\" \/><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><em>In our previous post, we described the top 5 mistakes why MRP system implementation could fail. We would like to proceed and give additional practical recommendations on how to avoid failure.<\/em><\/p>\n\n\n\n<!--more-->\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #343333;color:#343333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #343333;color:#343333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.mrpeasy.com\/blog\/mrp-system-2\/#How_Much_Detail_to_Input_into_the_MRP_System\" >How Much Detail to Input into the MRP System?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.mrpeasy.com\/blog\/mrp-system-2\/#Whats_the_Minimalistic_Approach\" >What\u2019s the Minimalistic Approach?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.mrpeasy.com\/blog\/mrp-system-2\/#Defining_the_Bill_of_Materials\" >Defining the Bill of Materials<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.mrpeasy.com\/blog\/mrp-system-2\/#Defining_Work_Station_Types\" >Defining Work Station Types<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.mrpeasy.com\/blog\/mrp-system-2\/#Defining_the_Routing\" >Defining the Routing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.mrpeasy.com\/blog\/mrp-system-2\/#Final_Words\" >Final Words<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Much_Detail_to_Input_into_the_MRP_System\"><\/span>How Much Detail to Input into the MRP System?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The main reason why small manufacturers fail MRP implementation is not having a clear understanding of the most important goals and benefits.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Very often, everything is considered important and much energy is wasted on minor points. In practice, if the management of every single detail, process, and nice-to-have is expected from day zero, then the implementation can quickly become too difficult.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The few key people who thoroughly test and pilot the software are not capable of using the software in the name of all others who will be using the software at any given time (e.g. reporting for 25 shop-floor workers).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>We suggest starting with the minimalistic approach in implementing an <a href=\"https:\/\/www.mrpeasy.com\/mrp-system\/\" target=\"_blank\" rel=\"noreferrer noopener\">MRP system<\/a> \u2013 do the least you can to get the most results. <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s ok to want it all, but are you prepared to pay the price?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Start with this idea: 20% of actions bring 80% of results. Even if you are well prepared, <strong>you should always start simple. <\/strong>Only build out complex procedures as you become more comfortable.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Whats_the_Minimalistic_Approach\"><\/span>What\u2019s the Minimalistic Approach?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">From the business perspective, the two most essential functions on which the MRP system performs excellently are:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1) Capacity planning: <strong><em>When can I deliver?<\/em><\/strong><br>2) Cost calculation: <strong><em>How much will it cost?<\/em><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For most manufacturing companies, this information gets 80% closer to the finish line. Therefore, these two goals are usually the most important.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If there\u2019s no clear approach to how <a href=\"https:\/\/www.mrpeasy.com\/capacity-planning-software\/\" target=\"_blank\" rel=\"noreferrer noopener\">capacity requirements planning<\/a> is set up, lead times are based on gut feeling, product costing is a mess and then what matters is<strong> improving the situation. A huge step forward would be achieving a guaranteed few day\u2019s accuracy<\/strong> in scheduling (and promised delivery dates!), which only takes a fraction of the energy required for achieving an hour of accuracy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The key idea is to avoid micromanagement and focus only on the critical.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What does this mean? This means realizing that many of the smallest details of production &#8211; individual operations, sub-assemblies, sub-level BOMs, half-products, etc. &#8211; are not that relevant in the big picture.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You may say, \u201cBut all the details ARE important!\u201d Yes, but some things matter more than others when keeping the main objectives in mind.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Defining_the_Bill_of_Materials\"><\/span>Defining the Bill of Materials<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Having a single-level Bill of Materials is the easiest situation to handle. There is only a list of raw materials &#8211; no sub-assemblies, which can create additional complexity and confusion.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is the key.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To get started, that is exactly how you should define your Bill of Materials for the software (it doesn\u2019t matter how many levels and sub-assemblies there are from the engineering point of view!). (Learn more about <a href=\"https:\/\/www.mrpeasy.com\/bill-of-materials-bom-software\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">BOM management software<\/a>).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>Purchasable raw materials go in one end and the product comes out the other end. Zero sub-assemblies. No sub-levels. Everything merged into one. Simple, friendly and beautiful.<\/em><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A kind of <em>black box<\/em> is created where materials go in from one end and products pop out from the other.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>This achieves several goals:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>There is a clear connection between raw materials and the end-product. <\/strong><\/li><li><strong>The material cost can be easily calculated.<\/strong><\/li><li><strong>It is very simple to understand.<\/strong><\/li><li><strong>It is very simple to report production finish.<\/strong><\/li><li><strong>The product is available and in stock.<\/strong><\/li><li><strong>The materials are consumed.<\/strong><\/li><\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">In some situations, the possible down-side is that the inventory levels of sub-assemblies are not tracked. But this vastly outweighs the simplicity of use.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Certainly, your employees already have (or should have!) the instructions on how to build the products. The software does not need to know-it-all and tell-it-all.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Defining_Work_Station_Types\"><\/span>Defining Work Station Types<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>A workstation<\/strong> is a place where individual operations are done. <strong>One operation can be done at one time, in one workstation. <\/strong>The workstation could be a machine, a bench, an assembly table, etc.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>A workstation type<\/strong> is a group of workstations that can all do the same tasks. For example, five CNC machines, or two assembly tables, or one oven.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A workstation type could also represent a <strong>virtual group of machines or tools<\/strong>; for example, a woodworks area with 10 different machines and tools, where, in practice, only 3 jobs can run in parallel. Therefore, the \u201cwoodworks\u201d workstation type would have 3 workstations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For effective operation planning, it is important to revisit how you currently group your workstations into workstation types.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In one scenario, each machine could belong to its individual group. But with many machines, this is likely impractical, since the operation flow can get very complex. In the opposite scenario, if there is just one group, then there will be little insight into real capacity and bottlenecks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An optimal balance needs to be found. More isn\u2019t necessarily better. <strong>If it\u2019s possible try to regroup, simplify and generalize<\/strong>. The list of workstation types should be kept as short as possible, but not shorter.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Defining_the_Routing\"><\/span>Defining the Routing<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Routing is the list of operations &#8211; the big steps through which the product needs to go.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What it\u2019s not: instructions for building the product.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The same logic applies \u2013 keep it as simple as possible, but not simpler.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The first priority is obtaining an accurate production schedule and a capacity plan. For this, a very general and high-level routing will be sufficient.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>A common mistake<\/strong> is defining every single detail, every smallest procedure and expecting someone to report each step of the way. For <a href=\"https:\/\/www.mrpeasy.com\/production-scheduling\/\" target=\"_blank\" rel=\"noreferrer noopener\">production scheduling<\/a> and <a href=\"https:\/\/www.mrpeasy.com\/capacity-planning-software\/\" target=\"_blank\" rel=\"noreferrer noopener\">capacity planning<\/a> purposes, most of these details are irrelevant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How to define a routing? <strong>Use a stopwatch<\/strong> <strong>to measure how much time it takes, per workstation type, to build the product. <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Then, simplify: build the routing with as few lines as possible, following a few key stages of production. If two lines have the same workstation type, could they be merged? Very often, they can.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There might be 100\u2019s of individual operations performed, but following this method, you might end up with a routing like this:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"354\" height=\"179\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2017\/10\/pic1-1.png\" alt=\"\" class=\"wp-image-6933\" srcset=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2017\/10\/pic1-1.png 354w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2017\/10\/pic1-1-300x152.png 300w\" sizes=\"auto, (max-width: 354px) 100vw, 354px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Or, something like this:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"602\" height=\"196\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2020\/12\/pic2.png\" alt=\"\" class=\"wp-image-6935\" srcset=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2020\/12\/pic2.png 602w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2020\/12\/pic2-300x98.png 300w\" sizes=\"auto, (max-width: 602px) 100vw, 602px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">(WST &#8211; <em>Work Station Type<\/em>)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You may say that this is too general to represent how your product is made &#8211; things move back-and-forth, etc&#8230;Yes, but you will still get a reliable capacity plan and an accurate production schedule. Plus, it\u2019s very easy to manage, unlike when there are hundreds of defined operations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>All in all, this achieves several goals:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>It is possible to easily plan the capacity of each workstation involved with reasonable accuracy.<\/strong><\/li><li><strong>It is possible to plan the lead time with reasonable accuracy.<\/strong><\/li><li><strong>It is possible to easily calculate the manufacturing overhead and labor costs. <\/strong><\/li><li><strong>It is simple to understand. <\/strong><\/li><li><strong>It is simple to report production.<\/strong><\/li><\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Of course, if too simplified, the routing might be too general for real-time reporting of start-stop. But is that the first and foremost goal? Likely not. Instead, it will take considerable time before shop-floor workers are handed tablets for reporting. Before that, it\u2019s unreasonable to make things more complex.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Until workers start personally reporting operations, then the schedule should be used for understanding the order of priorities; and, once a manufacturing order is finished, you can just click \u201cfinish production as planned\u201d inside the MO. If something doesn\u2019t go according to the plan, you can still modify it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Final_Words\"><\/span>Final Words<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The idea of a minimalistic approach is to implement the MRP system in a way that the greatest goals and benefits are realized first and minimal effort is wasted on second-order priorities, which can lengthen and derail an implementation if tackled too early.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Following the 80\/20 rule (i.e. Pareto principle) will make the usage of the software straightforward for a small team. Complexity can be built successfully when needs arise and resources permit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Altogether, the following benefits may be realized with relative ease:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Production lead time is quickly and reliably estimated.<\/strong><\/li><li><strong>The production calendar is populated based on capacity.<\/strong><\/li><li><strong>The product cost is accurately calculated.<\/strong><\/li><li><strong>The demand for raw materials is accurately estimated.<\/strong><\/li><li><strong>Clear overview of the raw material and product inventory levels.<\/strong><\/li><\/ol>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>MRP system series:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mrpeasy.com\/blog\/mrp-system-4\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">MRP System Series #7: The right attitude for MRP system implementation<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-software-3\/\">MRP system Series #6:&nbsp;Implementing Manufacturing Software. Benefits from Process Changes<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mrpeasy.com\/blog\/mrp-system-3\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">MRP System Series #5: What Makes a Good MRP System?<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">MRP System Series #4: How Much Detail to Input into the MRP System?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-software-2\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"MRP System Series #3: Top 5 Mistakes in Implementing Manufacturing Software (opens in a new tab)\">MRP System Series #3: Top 5 Mistakes in Implementing Manufacturing Software<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mrpeasy.com\/blog\/mrp-system-mrp-erp\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">MRP System Series #2: What is the difference between MRP and ERP?<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.mrpeasy.com\/blog\/mrp\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">MRP System Series #1: What is MRP<\/a><a rel=\"noreferrer noopener\" aria-label=\"? (opens in a new tab)\" href=\"https:\/\/www.mrpeasy.com\/blog\/mrp\/\" target=\"_blank\">?<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In our previous post, we described the top 5 mistakes why MRP system implementation could fail. We would like to proceed and give additional practical recommendations on how to avoid failure.<\/p>\n","protected":false},"author":1,"featured_media":823,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[91,94],"tags":[17],"class_list":["post-814","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-implementation","category-tips","tag-mrp-system"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>MRP System Series #4: How Much Detail to Input into the MRP System? - Blog for Manufacturers and Distributors<\/title>\n<meta name=\"description\" content=\"Useful information about implementing the MRP system in your business. 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