Today, if you outsource your manufacturing, you’ll likely be saving money by not running your ERP’s manufacturing resource planning (MRP) module — heck, you might not have ever even purchased that module!
Why would you not get MRP? Because you realized when outsourcing your manufacturing, you essentially outsource your material planning as well, and there's significant savings in labor to not run MRP. Sure, you need your ERP system to run financials including AR/AP, order entry, inventory, human resources and CRM, but skipping MRP is ultimately a smart move.
However, there is a downside when you decide to drop MRP: without an MRP solution, your procurement team can no longer see the part-by-part demand. Your procurement team is now BLINDED and BOUND at the negotiating table to the total quantity of each part they'll buy over the next year for the combined demand of all your product lines. They're now forced to literally ask for the benevolence of the supplier they are negotiating with to give them this information!
But the reality is manufacturing forecasts change often –so either the supplier is doing repeated runs for you or you have to just deal with the ones they gave you.
Yes, excruciating laborious Excel work can give you a fleeting peek – but who has time to go through thousands of parts across dozens of product lines while trying to keep your global supply chain current? Kind of hard to do in front of the TV at night, isn't it? You could give it to the intern, but they better not make a mistake!
If this pain rings true, folks, then we’ve got an elixir for you. And – no snake oil involved.
Arena’s fall product release includes ‘Demand Analysis’, a unique product designed to empower procurement and level the playing field in manufacturing negotiations. Simply put, Demand Analysis leverages detailed Arena BOM data, allowing multiple manufacturing forecast scenarios, so you can optimize your rolling forecast and quickly calculate component demand.
You can now quickly see their overall forecasted material demand for each part aggregated across your entire product portfolio. Now the procurement team finally has a powerful tool to negotiate the best price from your suppliers and contract manufacturers – goodness which drops straight to the bottom-line.
Want to know more? Stay tuned.
And if you are interested in being part of the customer advisory board for this new feature, please contact Paul Welch at firstname.lastname@example.org.