Albert Einstein was one of the greatest minds of the 20th Century, but few of us know that not only was he a pragmatic and astonishing theorist, but also a very spiritual and personable person, who was very much in touch with music, love and life.
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Many organizations, regardless of industry sector or geographical location, find themselves in a comfort zone when it comes to managing their inventory. A high percentage continue to use Material Requirements Planning (MRP), and some even use spreadsheets for their planning, despite having expensive systems in place. The problem is that MRP was developed at a time when businesses could use static demand forecasts over an extended time period to allow for long production runs. In the modern world, long runs are rare and demand can be highly variable.
A few months back, I wrote a blog entry comparing the uncanny similarities between building your own furniture and ERP selection. Reflecting back on that post, I decided to brainstorm additional daily/real-life scenarios that can also be compared to daily struggles that manufacturers and distributors face within their own businesses. What was the next issue I decided to address? Inventory management and, well…baking a pumpkin pie.
For several decades, material requirements planning (MRP) has been the standard method for manufacturing and inventory planning. But in recent years it has come under criticism, and any manufacturing shops have adopted other approaches, such as kanban or lean manufacturing.