Lean supply chain, Pt. 4: resource planning in parallel
Manufacturing resource planning is increasingly essential to lean supply chain efficiency. But having MRP in place may be only a partial measure.
Process expert Jakob Bjorklund has suggested that, while having MRP in place is certainly a step toward operational efficiency in manufacturing, it can often take the enterprise only halfway as far as it might go.
“Even as companies try to focus on the disciplines normally associated with the idea of a lean supply chain,” Bjorklund said, “another fundamental paradigm shift that must take place within their organization, and it is often overlooked.”
That paradigm shift involves re-thinking the points at which manufacturing operations commit, keying ever more closely on demand. When demand is stable and highly predictable, “make-to-stock” (MTS) is a model that works well: resource planning is simple when demand is flat. Raw materials may be ordered in large, inexpensive quantities, because the timing of their use is easily established.
The problem, said Bjorklund, is that it seldom works out this cleanly in the real world. Even when some demand is flat, it is more typical that a significant portion of any manufacturer’s products will be ordered with fluctuating frequency, rendering a “make-to-order” (MTO) model more advisable.
His take-home point is that it makes sense to simply run both planning processes in parallel: identify flat-demand patterns and plan manufacturing resources for those products accordingly, but implement MTO planning for those products where customer demand requires more agile responsiveness.
“By continuously analyzing demand patterns and inventory turns, the point of postponement can be changed over time to achieve the optimal balance between efficiency and responsiveness,” he said.