Connect your buying team with suppliers and eliminate error-prone manual processes.
Material Resource Planning (MRP) software is a powerful tool for supply chains and manufacturing companies. It tells procurement teams what, when, and how much inventory to buy based on a lot of different inputs: forecasted demand, sales, inventory on-hand, work-in-progress inventory, estimated quantities, and dates on open purchase orders. These inputs also enable the MRP to make suggestions on open purchase orders (POs)–for example, which to pull in sooner, push out later, or cancel based on changes to the business. For replenishment and first mile accuracy, MRP software is extremely valuable and a lot of companies wish they had access to it.
NetSuite has its own native built-in MRP and many bolt-on MRP partner solutions that integrate directly with NetSuite, so users have all the necessary information to create, review, and approve POs. The challenge is that, while buyers have all the info they need to generate purchase orders, suppliers are in the dark. The ERP does not extend to the supplier to collaborate on purchase orders, and there is no functionality to ensure the critical supplier data that feeds the MRP is accurate and real-time. The MRP is fully reliant on buyers to manually get updates from suppliers via email, spreadsheets and/or phone calls. Then, PO changes must be manually entered into the ERP to update each PO line with each change, or else the MRP is running on bad data.
Let’s unpack how often PO data is changing in today’s disruptive supply chain world. Would you be surprised to learn that ~52% of ALL direct spend purchase orders will need to change during the PO lifecycle? Or does that seem like a low number based on how difficult dates and quantities are to manage right now? Over half of all purchase orders will need to be adjusted. Let’s take that a step further: how many times will it need to be adjusted during the PO lifecycle? With lead times getting longer and longer, a single PO line may need to be adjusted many times.
This is a lot to handle, and there are plenty of opportunities for error. If half of all POs are changing, what percentage of those changes actually make it back into NetSuite? Half? If that’s the case, 25% of all your POs have inaccurate data. Yikes. You’re spending a LOT of money and time setting up an MRP, but your data is still a mess. Would you feel comfortable running your business knowing you’re basing decisions on data that is 25% outdated or wrong? Do not let your MRP make that mistake either!
Relying on manual processes for data entry and correspondence just won’t cut it. This is where an automation solution makes the most sense. All dates and quantities are real-time, with no human error, and you’re always operating with correct PO data. Partial shipments are now more common than ever, but many companies keep their quantities labeled as the full order and accept the inventory when it arrives partially. With automation, suppliers provide delivery schedules for partial shipments, and the solution automatically splits those lines by quantities and dates so MRP knows when the inventory will actually arrive. Both ERP and MRP have 100% accurate data at every moment of every day so you can trust every business decision you make.
Let’s talk about communication. Many buyers rely on email and phone calls to get the information they need from suppliers. Is follow-up scheduled? When was the last time the supplier sent an update? Was the update recorded? Can others on the team see those updates when needed? In most cases, MRP intelligence on PO adjustments is rarely actioned to suppliers because of clunky communication and the other 100 things procurement professionals have to accomplish each day. Adopt a platform that makes it simple to action pull-ins, pull-outs, and cancellations all in one place. Communications are logged and attached to individual POs, updates are visible in real time, and buyers finally get to stop wasting time chasing down information.
MRP is an incredibly powerful tool, but only if the data going into it is accurate and up-to-date. You may be hesitant to spend money on an MRP solution because your bad data will lead to bad recommendations. Without automation, your hesitations are valid. If you already use an MRP and rely on manual data entry or disparate communications, you’re almost certainly not getting the most out of it.
SourceDay’s automated platform connects your team with suppliers, eliminates manual data tasks, and ensures data is 100% accurate.