Lean Manufacturing 306

In some ways, MRP II implementations are easier for continuous

flow manufacturers; in some ways they are harder. There tends to be less raw data to work with, compared to batch or discrete companies. There may only be a few hundred items used. Converting old data into the new system is less time consuming as a result. There are usually fewer employees available to learn the new system, so the task of training them is easier. However, if they have never been exposed to MRP II systems before, it may take a while for MRP principles and concepts to take hold.

A typical MRP II implementation in a continuous flow plant can take from six to nine months for a full system (excluding corporate functions). Payback on the investment can take from nine to eighteen months.

Benefits can be achieved almost immediately, and include:

• Improved process yields

• Improved capacity utilization

• Uncovered "hidden" capacity

• Reduced inventories and safety stocks

• Better cost identification and management

• Quicker response to market changes

• Reduced downtime

• More efficient use of warehouse space

• Improved inventory accuracy

• Improved operating flexibility

Continuous flow manufacturers have invested significant funds in plant floor technology to leverage operations and maximize process yields and capacity utilization. This has contributed to an atmosphere of skepticism about the applicability of higher-level computerized business systems in these environments. Today, less than 15% of continuous flow manufacturing companies have installed MRP II systems.

This condition is now recognized as an opportunity to seize competitive advantage by many process manufacturers who are more likely to say "Please, More MRP!" now that they have seen successful implementations in their industries. Throughout the 1990s, the biggest growth in first-time installed MRP II users will come from continuous flow manufacturers who include MRP II in their arsenal of weapons to help them compete more effectively in the areas of cost, quality, and delivery.