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Posts Tagged ‘Material requirements planning’

Data integrity issues in MRP implementations

December 22, 2011 Leave a comment

A good description of the data integrity issues found in MRP implementations can be found in the article on MRP in Wikipedia. In a nutshell, if the

English: MRP

Image via Wikipedia

information in your manufacturing system is bad, don’t expect its planning to be any better (or GIGO). While you are implementing the MRP module in OpenERP, you should pay attention to the following information items in your systems:

  • Lead-times: critical for the timing phase of your planning. If production or supplier lead-times are not accurate, don’t be surprised to find planning dates that are not realistic.
  • Stock levels: very critical, since all the procurements are created when the stock levels drop down below its reorder point or when a customer makes an order (depending on how you have your system set-up)
  • Bills of Materials: your system will procure either raw material, work in process inventory or end-items. Which items it will procure depends on the accuracy of Bill of Materials. Your BoM needs to reflect how your product is assembled. I found some places where the BoM only reflects the cost structure of the end-item, and that is wrong. The cost of the end-item is a different problem that needs to be addressed in a different module than the manufacturing module.
  • Products: your system needs to have all the products you procure (either by purchasing or manufacturing) and sell. And its description needs to be complete.
  • MPS, or production schedule: needs to be available in order to make the plan. In all the manufacturing plants there is a production schedule. People might not be aware there is one, but actually you can find it in the daily or weekly manufacturing plans.
  • Reorder points: you need reorder points (minimum and maximum stock levels) in some products in order to not disrupt your quality of service. We will not get into the calculation of these items (by now)

    We will get into more detail on these items and how to address them in further posts

     

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OpenERP and E-Commerce

Shield logo for Ubercart project

Image via Wikipedia

Last week a client asked me if OpenERP had an E-Commerce solution, and she was disappointed when I said no. But she was glad when I explained her why it was already integrated with existing open-source e-commerce solutions, such as Magento. And I wanted to share my thoughts on this, since some people keep asking for integrated e-commerce functionality (as well as business intelligence functionality).

To the best of my knowledge, to this day OpenERP already has connectors to Magento Commerce and Joomla. Does not have connectors to Drupal (Ubercart and Drupal Commerce projects) but I expect OpenERP to have those connectors soon since the Drupal community is growing fast (actually I am really tempted to develop a connector to Drupal Commerce but first I need a project to fund the development, and I need the time. Plus, Drupal Commerce first has to release an stable release). Which means, you can install your e-commerce solution, and integrate it with OpenERP.

What areas do you have to integrate? The product catalog comes to my mind (and the ability to manage multiple pictures per product). Then the sales orders, invoices, price lists and the delivery and inventory information. Those are the information items that should be available to the e-commerce solution, in order to make it work properly. Then the customer information, such as credit limits and order history. Lots of information that needs to be pulled from OpenERP.

OK, now why it is not a good idea for OpenERP to be a full-fledge e-commerce solution. Because the ERP and MRP problems are big enough. That’s why. E-Commerce is a different beast on its own, that demands other skills. Such as having the ability to make the page look good and the capability of implementing a design in your page. Plus, the page needs to be optimized for search, and the e-commerce solution needs to manage content the way a CMS does. That is quite an stretch for an ERP system. Ah! Have I mentioned that e-commerce packages need to integrate with payment gateways and sometimes need to be multi-lingual?

At the end of the day, the OpenERP community is not big enough to justify the development of an e-commerce solution on its own, and the e-commerce packages around already do an outstanding job. We will be much better off focusing on the development of the integration connectors, rather than developing an e-commerce solution from the ground-up.

Cheers,

Getting started with the OpenERP MRP module

March 8, 2011 1 comment
MRP

Image via Wikipedia

Getting started with the MRP module can be a daunting enterprise, and it is easy  to get lost at it. But actually it is easier than it seems. I will cover the functional elements you need to get started with the MRP module. I will not cover how to do that, it is already covered in the documentation.

In order to start with the MRP module, you just need four pieces of information:

  1. Product information; the first information item you need. Which products you are planning to sell and procure.
  2. Bill of Materials, sometimes called formulas. They are a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, components, parts and the quantities of each needed to manufacture an end product.
  3. Stock information, pretty much how much inventory you have at hand. If you don’t have this information, you can’t even get started. MRP uses inventory information to determine when and how much to procure.
  4. Master Procurement Schedule; this provides the list of the products you need to procure (either purchase or manufacture) and when you need them. This can be provided by the stock_planning module. Or you could keep an spreadsheet updated with your procurement needs and create the procurement orders from there.

If you are planning on implementing the MRP module, you need to assess the four points I described above. Chances are bill of materials are maintained in paper or spreadsheets. The stock information might be maintained by an information system within the company. But at the end of the day, you will need to assess the quality of the bill of materials. Implementing them will be the longest item in the MRP implementation plan, and you can’t take shortcuts over there. Chances are you will need someone manually checking they are fine, and that you will need to import them manually (which might be the healthiest thing to do).

Well, just wanted to cover some information issues that come up when you are implementing the MRP module.

Cheers,