Industry Observation: Demand Management Is the First Gear of MRP

Forecast consumption, sales-order demand, and dedicated material preparation decide whether MRP has a reliable starting point.

After releasing Lean APS and Super MRP, we worked with many companies on planning optimization. Some projects were light consulting, some solved focused topics such as MTO order transfer, substitutes, or specified suppliers, and some made dormant MRP processes run again.

The first topic worth discussing is demand management. It is the source of MRP and the first gear of planning collaboration.

MTS: how forecasts are built and consumed

Many companies maintain PIR only by product and plant. That is too rough for businesses where channel, customer, region, or subsidiary matters. A better scheme lets forecasts be maintained at the right granularity and lets customer orders consume forecasts by clear priority.

MTO: demand cannot be left to manual transfer

In MTO scenarios, stock-preparation orders may later become formal customer orders. Different customer orders may also transfer demand because of priority or supply constraints. If these relationships are not governed, demand is easily lost or duplicated.

Dedicated material preparation for key customers

Some customers require dedicated raw-material preparation. If that stock is still visible as ordinary stock, other orders may consume it, and MRP may stop purchasing for the key customer. A dedicated preparation pool protects delivery without disturbing normal demand.

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