Manufacturing Requirements Planning 

The third step on the path is Narrowing the Field. There are literally hundreds of MRP software packages on the market and we need to narrow the field to four or five packages. The path to narrow the field is to ask each of the vendors that we are considering how close the package comes to meeting company needs. One way to gather this information is to prepare a Request for Proposal (RFP) and ask the vendor to respond to the questions. The basis of the RFP is our bulleted requirements. We ask each vendor to tell us if their package can meet the bulleted requirements as follows:

4: without any modification

3: with 8 hours of modification

2: with 40 hours of modification

1: with 160 hours of modification

0: more than 160 hours of modification

Also included in the RFP are general requirements, vendor qualifications including vendor financial stability.

The returned RFPs can easily be analyzed using a spreadsheet program and the four highest scoring vendors can proceed to the next step. This process produces support documentation needed for management to identify on what basis the four finalists were selected.

The second step on the path is Setting the Goal. When selecting an MRP package, we should not seek merely to automate the current processes or even worse try to automate the current manual systems by reproducing the same manual forms on a screen. Instead, take the opportunity to reevaluate current procedures. The introduction of a new MRP system is a perfect opportunity to redesign or reengineer obsolete processes for improved efficiency. In many cases the reengineering yields can be achieved by just implementing a new MRP system.

Once we know the way we want the future processes to be we can then develop the requirements. This will be the target that we

The fourth step on the path is to Determine the Winner. In the RFP, we asked the vendor to tell us how well our requirements were met, but to determine the winner we must now determine how well the finalists met our requirements. The way for us to see how well the package meets our requirements is to ask the vendor to show us by demonstrating the package. Most demonstrations are nothing more than a glorified sales presentation. The way to change the demonstration from a sales promotion to an important tool in the selection process is to take control of the demonstration by telling the vendor exactly what should be demonstrated and how it will be judged. This is done by devel­oping a "script" that each vendor must follow. The script should follow the normal flow of the business events. Every item that was required on the RFP checklist should be included in the script.

The data to be used in the demonstration should be real company data. This insures that the personnel attending the demonstration will feel comfortable with it.

The fifth step on the path is Awarding the Medal. In this step we verify that the package will work in our environment. This is done by stress testing the package in the client's production environ­ment. Also while the package is in house, we should take the opportunity to use the system to insure that we did not miss anything during the demonstration.

To insure that the vendor is everything it represents itself to be,
we perform checks on the vendor including contacting random
customers and users' groups. Also, during the background check
we verify the financial stability of the vendor and checfe^Jor any
lawsuits. X

The final item before we sign on the dotted line is to negotiate the contract. Most companies negotiate on price but often the condi­tions in the contract can be more costly than any reduction from list price that can be negotiated. Many companies do not try to change the fine print. As part of negotiations, every paragraph should be reviewed and considered negotiable as part of the final negotiations. Items to look for are nontransferability and non-portability of the computer that the software is run on.

When negotiating price, be sure to include the following:

• maintenance cost for the first five years

• training

• upgrade costs

• downsizing rebates

• etc.

The path that has been described in this paper will insure that a company has very few surprises when the software is imple­mented.

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