Demand Driven MRP replaces static shortage reports

We get a very high volume of requests for shortage reports from our customers.  This is the dominant planning tool that many purchasing agents are familiar with.     DBA does not offer traditional shortage reports because they have significant flaws and undermine the integrity of our demand driven system.  The PO generation screen in the DBA MRP system is actually the ultimate shortage report and will deliver superior results to any static report.

Shortage Report Flaws

Manufacturing by its nature is a time phased activity with ongoing demand and projected supply continuously changing over time.   A shortage report attempts to simplify things by removing the element of time.   This is a severe compromise and cannot match the reality of your time phased supply and demand.   

Another significant flaw is that a static shortage report does not have the ability to uncover your firm order demand through all levels of production.   The planner will need to make in-depth analysis and projections to fill in the demand profile to make decisions on how much to buy.   There is simply too much interdependent info to do this comprehensively.  Small errors in these projections will be amplified through all levels of production and lead to the “bull whip” effect and result in large errors and inefficiencies in your inventory.  This ‘bull whip” effect is magnified significantly the further into the future you extend your planning horizon.  The further you plan and project into the future, the more uncertainty you will interject into your plan.

MRP PO Generation is the ultimate shortage report

MRP steps you through a very structured and disciplined approach where you convert your firm sales order demand to Jobs, and then progress to convert subassembly Jobs through all levels of production, and you then proceed to PO generation.   This transparent and intuitive process cannot be replicated in a static report.   The PO generation screen ends with the ultimate shortage report where you know for a fact that your purchase orders are aligned with the planned start of your Jobs.

MRP PO Generation Benefits:

  • Acts on only firm demand for items you sell
  • Generates firm Jobs for subassemblies through all levels of production
  • Purchase Orders are intimately tied with the planned start of your Jobs
  • MRP PO Generation does all the work to make this the only viable shortage report needed
  • Verify Supplier Sources and Prices when convert POs in the MRP PO screen
    • This will maintain your item purchase sources automatically
    • Update your estimated costs based on your default purchase prices
    • Verifying prices will improve accuracy of inventory value in the system

Additional Resources

White Paper - Demand Driven Planning