MRP for electronics manufacturers

Whether you manufacture your own electronics product or offer EMS (electronic manufacturing services), there are numerous reasons why MRP is essential. 123 Insight explores some of the common problems that electronics manufacturers experience, how MRP solves them and what additional benefits it can provide.

Some companies may have started with their own product range, then branching out to offer manufacturing services. The inverse is also true, with EMS companies later developing their own products, resulting in a steep learning curve when systems in place are inefficient or not fit for purpose.

Why do Electronics Manufacturers need MRP software?

Manufacturing electronic products delivers many unique challenges. Products need to be tracked by serial number and batch, with components sometimes also requiring this level of traceability.

Bills of materials can contain thousands of components across different boards. Many customers demand Line Card Maintenance, where components from one manufacturer are required. While certain components may be off-the-shelf items, others might have much longer lead times.

Purchasing can be a major resource drain. Companies without MRP will have fragmented purchasing/supplier history data. Along with traceability of components, they often need to capture test results during manufacturing, and even equipment used during manufacture or testing may need tracking. A good MRP system will allow you to track calibration and maintenance schedules, ensuring that staff cannot use non-calibrated equipment.

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How can MRP help quality?

There are many different industry-specific quality accreditations that electronics manufacturers may have to adhere to. Companies manufacturing medical electronics will require ISO13485 while those serving the aerospace industry will need AS9100. Manufacturing software can also control quality based on staff qualifications. Key staff may be trained to higher levels, so keeping track of who is qualified to perform specific operations is paramount. A good MRP system will allow you to create a ‘skills matrix’, ensuring that only qualified staff are able perform certain operations.

EMS companies often offer rapid prototyping and volume manufacturing. The ability to create a bill of materials, manufacturing routing and quoting for an item quickly and accurately is vital.

Auditing for electronics manufacturers often causes headaches, especially when information is held in separate systems.

Reworking of electronic components can be elegantly handled using 123insight. Results can be captured against serial numbers, with the operator instructed if the unit has passed or failed. Another staff member could apply fixes, logging timings before returning it. 123insight’s Software Development Kit can communicate with external equipment such as Automated Optical Inspection, ensuring robust data exchange and immediate access to test results.

Implementing MRP

A common issue for electronics companies is the amount of data to migrate, however with a structured approach the task may not be the headache it appears and may deliver several side-benefits.

Taking time to clean your data before transfer allows you to sort out dead wood. Use the 80/20 rule, transferring the 80% that you’ve used in the last couple of years. There’s also no point in transferring customers or products that you know that were one-offs. If they do spring back to life you can resurrect the data from your legacy systems if required.

It’s also worth seeing whether it’s worth restructuring your data. Product numbers might be a mish-mash of different structures created over time. Restructuring them into a common format can make it easier for staff to transition to a new system if they know all data adheres to a common format. A good MRP system will allow you to quickly search and filter your data.

Once you have clean data, importing it doesn’t have to be complicated. 123 Insight offers its Data Import Toolkit, allowing you to easily import stock details, BOMs, resources, routings, customers, suppliers, opening stock balances, open sales orders and open purchase orders from Excel spreadsheets.

Case study: An EMS company that migrated to 123insight also used the Data Import Toolkit to respond to new enquiries. With BOMS often consisting of 150 lines containing up to 1000 parts, they now have a quick and easy method to load jobs, run MRP, identify the requirements and generate purchase orders.

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The implementation process

The best way to start is by creating an implementation checklist, detailing tasks for each department. Each task should be prioritised so that implementation can be broken down into stages where each workflow can then be tested. Place an estimated time for completion against each one – once tasks are allocated to individuals it’s then easy to filter this so that everyone has clarity over their workload.

Benefits

There are obvious benefits to a single manufacturing system covering everything from sales, purchasing, stock through to production and despatch. You can respond to quote requests quicker and locate orders within your facility. Accuracy will improve, so you can quote more competitively and confidently.

You will know what is truly in stock and will stock more of the right products. Stocktakes that previously took days can be done on a rolling basis. With 123mobile users can quickly perform ‘ABC’ checks of stock items in a location, maintaining constant accuracy.

From a procurement perspective, running MRP considers demand and available stock, providing suggestions of what to order and from whom. 123insight provides a list of possible purchase orders, which can be raised and emailed instantly, drastically reducing the purchasing process. MRP also takes care of generating works orders, providing visibility on current and future orders.

Lead times will be more accurate, as you have a better grasp of what is in production or planned. Companies will often see lead time reductions, as there are fewer stock outages and production planning is also taken care of.

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Audits that previously spanned days can now be done in hours, with auditors never leaving their desks.

There are many intangible benefits which can make drastic changes to a business. For example, purchasing might buy resistors in reels of 1000 but Stores needs to see them as singular items.

With better version control over the BOM in areas such as drawing numbers and issue levels it’s never a problem if a customer needs to order older versions, as full component and purchase history are immediately available. A common user interface and workflow process across departments make it easier for companies to grow without requiring more administrative staff and reduced paper usage.

Case study: A company manufacturing refrigeration units replaced their paper-based and Excel systems with 123insight across their two factory locations. They were subsequently able to grow the business by 240% with the same number of admin staff.

Summary

The electronics industry has many areas that are common with other industries when it comes to MRP software, but by being able to manage those little differences is what will give you the edge.

A system that can competently handle the little nuances with this sector can allow you to expand and respond rapidly to change, while also freeing up staff from the mundane to focus on tasks that add more value.

Find out more here.


images supplied by 123 Insight.