MRP II Class A
I first encountered MRP II in the early 1990’s where my employer was very keen to follow its methodology. You may or may not have heard of the principles surrounding the standard but it makes total sense when trying to create an effective and competitive organisation.
When I was involved in our accreditation we were the very first sales organisation (UK) in Europe (within our corporation) to achieve the “Class A” standard. We were extremely proud
especially when it went up on a huge screen at a European meeting!
Creation of MRP II
The principles of the standard were created by Oliver Wight. Published an article in the 1970’s surrounding the integration of the supply chain and the connection to ERP systems. A year (1977 I believe) later he issued a specific checklist.
What was being looked for was supply excellence, along with a process of sales and operations planning. The objective being that if you could ultimately refine supply and demand, then it would mean taking out cost within the supply chain, whilst being able to give a high level of customer service and satisfaction.
What is MRP?
MRP is an acronym which stands for “manufacturing resource planning”, although from my experience we approached our Class A standard from both a sales and manufacturing perspective; with the emphasis being driven by customer requirements travelling down the supply chain and subsequently how we could react to them, whilst delivering cost efficiency with high levels of service.
It heavily relies on an excellent “Sales and Operations Planning” process (you can read about that in one of my other articles).
Achieving the Standard
I recall us going through a number of audits to achieve our Class A standard. It was a lot of work, but equally it was very rewarding. It is definitely not easy to achieve and I don’t recall many times when Managing Directors, Sales Directors and other senior personnel were not visibly nervous when going through the audit process.
It was very challenging and there had to be a high degree of evidence that the level of control of the business, had consistency and continuity e.g. evidence that stock availability to customers was consistently in the high “90%’s”, that the S&OP was an ongoing process, correctly documented and actions were followed up etc.
The list originally consisted of 20 questions but I have seen audits where 30+ questions have been present. There are often sub-sections to each question which have to be answered with a very high level of detail.
Some questions are related to just manufacturing processes but a high number also are relevant to sales processes. The list covers areas such as
· Management Commitment to excellence
· Strategic Planning
· Forecast Measurement
· Customer Order Promising
· Distribution Resource Planning
· Inventory Accuracy
· Relationships with suppliers
· On Time, In Full fulfilment of customer requirements
· Production Planning Performance
And many more.
Is MRP II Suitable for my Business?
The principles of Class A can be applied to any business whether you physically manufacture a product or not. Obviously the original Oliver Wight checklist was based on a sales and manufacturing organisation but in reality I could apply this to your business in whatever market you are in or whatever your internal business structure is.
Every business must strive to be the best within their market place; without measuring your success, both externally and internally, you will leave yourself open to competitor attack which could cause considerable issues for your future survival!
Try it! Obtain the official checklist and see how your business fairs against it.