Production Planning and Quality Management

An ERP system is a software package that attempts to integrate all data and processes of a company into one unified system. A typical system will use multiple components of hardware and software to achieve its

goal. An MRP system is a software based planning and inventory control system that is used to manage certain manufacturing processes. An MRP should ensure proper amounts of materials and products are available, keep inventory as low as possible and plan manufacturing and purchasing activities and delivery schedules.

Manychip should go with a MRP utility because their short term contracts, land the rapidly changing IT environment lends itself to low levels of in-stock products. The chips they make change rapidly and keeping large amounts of stock would no be feasible. Though MRP is an inflexible system some of it’s disadvantages will work at Manychip.

The advantages of an ERP System are many and the one that stands out the most is its ease of use. This is a very user friendly type of system that requires minimum training to gain maximum efficiency from the software.

An ERP system also introduces: Business best practices which helps provide greater control and standardized the way businesses perform their day to day processes, Ready-made solutions for the most common problems and Enterprise wide information sharing so everyone can see the same information from any computer in the company.

Another thing that makes an ERP system so great is the fact that its made to be used “right out of the box” requiring only minor customization to fit a company’s particular requirements. Also, companies only have to enter information once into their database for all departments to be able to access what they need. This actually leads into another advantage of the ERP system and that is time reduction for task completion. Since all departments now have computerized access to information and are able to retrieve it quickly they are able to improve their times for decision-making.

This all leads to the final advantage of the ERP system and that is increased customer satisfaction. The paper-based system often caused delays, lost orders and errors in processing due to so many hands being “in the cookie jar.” An ERP system, allows for quick movement of orders through each department with no in-basket to hold up the order.

Even with all of it’s advantages, an ERP system does have it’s disadvantages such as the length of time it takes to implement the program, six months to 3 years in some instances. There are also major cost associated with this new system. The software and implementation phase can cost from $400,000 to $300 million with the average cost being $15 million. After this a company will be hit with costs ranging from training and customization, testing and implementation to data conversion and analysis. In the end the benefits will greatly outweigh the costs but, until then there will be a considerable bill for training and implementation.

One advantage of an MRP system is its ability to keep inventory under control. This is good because lower levels of in-stock products mean that the company isn’t incurring charges for it to be stored.

The biggest disadvantage to an MRP system is the integrity of the data. If there are any errors in the system your production schedule and output will be wrong. Another problem that many companies have with an MRP is the fact that the user must specify how long it will take to produce a product and it assumes that this lead time will be the same for every product, every time it is made and will not automatically change if the quantity changes.

Finally, the other major problem with MRP is that it can and will give results that are very much impossible to implement however, MRP II takes care of most of this problem because it integrates the financials into its database.

E-Z MRP was on my candidate list but, I discarded it because it was for very small businesses and it’s capabilities did not fit in with Manychip. Another package I really considered for a while was Sage Pro. It had everything that Manychip needed but, it was more of an ERP system than a MRP system.

However, Merlin MRP Factory is geared for the IT manufacturing industry. This program is a new generation of software that manages ever level of your resource planning. The heart of this MRP is its ability to rapidly calculate shortages for all or just a selection of your production jobs. Merlin also allows the user to see all of their scheduled shop floor jobs, activites and work-station analysis at a glance with a simple color coding system. This color system also gives you the ability to quickly see jobs that are due and/or late. Merlin is fully customizable to fit any company’s exact needs with two programs that can be set-up on-site with installation and training done on premises. This means that when Merlin is handed over to you it is fully up and running with a well trained staff ready to take the reigns.

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INFOR, Focus on Essentials. Material Requirements Planning (MRP). 2007. http://www.lillysoftware.com/software_solution/manufacturing/material_requirement_planning_MRP.asp. Retrieved 06-06-2007.

Merlin MRP Software for Manufacturing Plants and Job Shops. http://www.merlin-mrp-software.co.uk/. Retrieved 06-06-2007.

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