5 things Odoo MRP doesn’t do
… and the consequences
Odoo is a trendy, modern and popular ERP business application suite. Its open source community, rich partner network, flexibility and affordable pricing make a powerful business proposition for companies of any size.
However for complex manufacturing environments it does have some limitations, which we want to explore a bit with you in this post.
We’re eager to hear feedback and comments on these points. Feel free to post those on our discussion forum.
1. Purchase long lead time components isn’t possible
Many businesses have some raw materials with very long purchasing lead times. Lead times of 6 months to 1 year aren’t uncommon (when material is shipped between continents). This supplier lead time can be much longer than the delivery lead time your customers expect on the sales order they place with you. Your purchasing team will purchase need to place purchase orders based on a forecast.
Odoo’s replenishment calculations only include the known sales orders, and not the longer term sales forecast. Long lead time raw materials can thus not be procured from odoo…
OK, and what's the conseqence?
Your purchasing team will use spreadsheets to manage the procurement of these materials. Sounds familiar?
2. What-if scenario planning
Evaluating alternative plans is very common in a planning process. Typical examples are:
- Evaluation of the impact of big changes such as an extra shift on some bottleneck machines, a big new customer contract, unavailability of a critical machine, introduction of new products, …
- Comparing a worst-case and a best-case business scenarios
- Separating a long term plan vs a short term plan
Odoo doesn’t allow a planner to perform such what-if scenarios. You could set up different databases, but that’s definitely overkill and not intended for this type of usage. An ERP tool is designed to handle transactions in the company, rather than being used as a decision support analysis.
OK, and what's the conseqence?
Planners will revert to back-of-a-napkin calculations or spreadsheets for evaluation of scenarios.
3. Consider material and capacity availability in the plans
Your production plans need to be realistic. You don’t want a plan that overloads your machines. You don’t want manufacturing orders scheduled to start tomorrow when the raw materials are available only next week. You don’t want to schedule the final assembly on a date when the subassemblies won’t be ready yet.
Odoo MRP (and any other MRP) work in an unconstrained way. Manufacturing orders in Odoo aren’t rescheduled to reflect the late arrival of material or a work center that is already fully booked.
Production plans are very dynamic and change from day to day. Such plan adjustment can only be done manually in Odoo.
Some examples:
- If a machine yesterday had some defect, the manufacturing orders planned for yesterday need to be moved to today to catch up.
- Some manufacturing orders may need to be postponed when a supplier unexpectedly delays the delivery of some materials.
OK, and what's the conseqence?
The production planner will use a spreadsheet on the side to compile a realistic and correct plan. These spreadsheets often simplify the product structure and resource to keep things manageable.
The plan manipulations can be quite time-consuming and heavily rely on the experience of the planner. We have seen planning spreadsheets that take the planner a full day to refresh. And we have come across excel spreadsheet of 30 MB that take several minutes to open and refresh all cells.
4. Identify sales orders that risk to be delivered late to customers
When materials or capacity are short, you’ll inevitably miss the delivery date of some sales orders. Planners need a good visibility on these situations such that the sales team and the customer can be notified if necessary.
Odoo doesn’t provide this kind of analysis on the sales orders.
OK, and what's the conseqence?
The spreadsheets explained in the previous step provide the planner with this insight. The information will be informally shared in your company.
When the bill of materials are deep, when components are shared across many end products, or when demands need to be prioritized properly, … this calculation soon gets too complex to perform in a spreadsheet. A dedicated APS planning tool is designed to calculate through complex supply chains and allocate material and capacity in a intelligent way. A planning tool can generate an accurate, up-to-date and intelligent plan much faster.
5. Smart reorder points
Odoo’s has reorder points that trigger (manually or automatic) new replenishments. New replenishments are created when the projected stock falls below a certain minimum level, and the size of the replenishment is controlled by a maximum order-up-to level.
The min and max numbers are manually set by the user. Easy enough, but that’s not very handy if you have to manage, let’s say, a thousand of those min and max levels. Your material planners will want to periodically review and adjust the reorder points.
OK, and what's the conseqence?
Yet another spreadsheet will be created to compute these minimum and maximum levels. The calculation will consider the average consumption, desired safety stock level, acceptable replenishment size, reliability of the supplier, cost, lead time, etc…
6. Dynamic calculation of sales order delivery dates
The title says we would give only a list of 5. We can’t stop and here is number 6…
A customer asks when you can deliver that new urgent sales order he’s about to place.
Odoo can compute an expected delivery date based on a standard manufacturing or purchasing lead time. This calculation doesn’t consider the actual availability of material and capacity.
When all material and capacity are readily available you may deliver sooner.
When material or capacity are short the expected delivery date from odoo may be too optimistic.
OK, and what's the conseqence?
In the worst case, your sales team will confirm sales orders without verifying the feasibility of the promised delivery date.
In the best case, they’ll contact the production planner who’ll review and judge ad hoc what delivery date is realistic. That works as long as there aren’t too many sales orders to be reviewed on a daily basis.
Conclusion
A pattern emerges from the above…
- Basic planning functionality is available in Odoo.
- When a more complex analysis is needed, planners soon start using spreadsheets next to Odoo.
- Beyond a certain size and complexity a spreadsheet-based planning process will no longer be sufficient, and proper system support for your planners is required.
And you? Where do you rank your planning processes along these steps?
