CRITICAL FACTORS IN THE IMPLEMENTATION OF MRP II SYSTEMS

The main objective or this paper is to describe the ten most important critical success factors involved in implementing MRP II, providing a theoretical justification behind each factor examined. The understanding of these factors shall assist firms in implementing MRP and may enable them to further improve their systems.

Keywords: Change Management; Critical Success Factors; Implementation ; MRP II

INTRODUCTION

MRP II is an organization-wide management philosophy that makes your manufacturing and distribution processes more efficient and effective through inventory reduction, supply planning and demand analysis. Contrary to what common sense says, MRP II is much more than a simple computational package, demanding involvement and commitment from all members of the organization.

During the implementation of an MRP II system, some barriers to the changes that this implementation provides are faced. This can determine the success or failure of the new management system. In this work we will deal with change management and its critical success factors based on experiences verified in several companies.

1. CRITICAL FACTORS IN THE IMPLEMENTATION OF CHANGES

The implementation of an MRP II system is not always an easy task involving, in general, a learning curve of up to 24 months (Ang et al., 1995). The literature points to a success rate (class A according to the classification of the North American consultancy Oliver Wight) in the implementations of only 25%. At this stage, the company is able to run what if simulations, with the MRP system providing a better understanding of the interrelationships of activities such as sales, finance, production and supply.

For a company to reach this level, it must overcome several critical factors which are a combination of various technical and human aspects, namely:

1. Top management support
2. Clear definition of goals and objectives
3. Interdepartmental cooperation and communication
4. Implementation Visibility
5. training and education
6. Committed and motivated staff
7. Knowledge of the principles of MRP II by the sales sector
8. Adaptation of hardware and software
9. Data accuracy and integrity
10. Expertise in Information Technology

1.1 Top management support

The creation of a steering committee for the implementation of the system must be committed, which must appoint a leader for the project. Your choice should take into account the following aspects (Habeck et al., 1996):

• Experience in leadership positions in various departments of the organization such as Production, Procurement and Sales.
• High credibility throughout the organization.

In addition to choosing the project leader, top management must also assume the following responsibilities:

• Convene periodic meetings to evaluate the project team.
• Decision to allocate large financial resources.
• Establishment of complete schedule for project establishment.

1.2 Clear definition of goals and objectives

The goals and objectives to be achieved with the implementation of MRP II must be widely disseminated throughout the organization. This prevents a distorted view of what this new system represents from being established, in addition to allowing better decision-making regarding the technical aspects of the system in terms of software and hardware.

1.3 Interdepartmental communication and coordination

Fundamental to avoid the conflicts that arise, above all, from the lack of coordination and communication channels between the various departments of the organization, preventing the flow of information necessary for the construction of data that is extremely relevant to the MRP II system, such as sales forecasting and planning of production.

1.4 Implementation Visibility

Providing a clear vision of the changes that an MRP II system means and disclosing all the implementation steps to the members of the organization avoids surprises and allows the appearance of a global discussion about the changes.

1.5 Training and education

According to Corrêa, two of the main factors responsible for successful implementations, training and education must reach “at least 80% of all components of the organization” (Habeck, 1996) at least in the initial implementation phase. Those involved must not only understand the part of the system with which they will be in contact, but also the overall logic of the system so that they understand the importance of factors such as: accurate data entry and updating systems in real time.

A “business meeting” environment should be created where there are agendas, objectives and records of facts, helping to create self-directed work teams. Room simulations are highly recommended so that members of the organization can have more direct access to the system before its effective implementation.

1.6 Committed and motivated staff

The Staff's motivation is critical since it is the Staff who correspond to the main users and feeders of the system's day-to-day data. It is necessary to create an environment of commitment within the organization to change. To do so, some measures must be taken, such as encouraging employees to take risks along with accepting any problems that this may mean. In addition, attitudes such as the announcement and repression of failures, which inhibit people's participation in the process, are completely reprehensible.

1.7 Knowledge of the principles of MRP II by the sales sector

Knowledge, by the sales sector, of some basic principles of the MRP II system would eliminate potential conflicts with the company's production sector. The origin and content of these conflicts are described by Melo (1995) and concern short-term production planning and control issues.

On the other hand, forecasting and planning a company's sales in an MRP II system is not the sole mission of the sales sector, and its members must naturally face the change in the scope of responsibilities.

1.8 Adequacy of hardware and software

Taylor (1995) points out some of the main characteristics in terms of hardware and software necessary for the successful implementation of an MRP II system.

• Hardware: the system must be able to run both on large systems and on PCs directly connected to the database and MRP.
• Software: it should easily allow the execution of the following tasks: transferring data, updating and registering bills of materials, determining downtime for preparing and maintaining machines, and above all allowing the execution of what-if scenarios, comparing different software programs production based on efficiency, inventory levels and customer service.

1.9 Data accuracy and integrity

For an MRPII system to be effective, it needs an accurate and updated database (Corrêa, 1993). Starting to use the MRPII before data accuracy levels of around 95% are obtained, at least, in relation to product structures, inventory records and lead-times corresponds to assuming a great risk of discrediting the system with users . The effort to achieve high levels of data accuracy can demand a long and laborious process of changing routines and procedures, which may include the implementation of cyclical inventories or the elimination of hot-lists.

1.10 Expertise in Information Technology

There is a need for a person with sufficient technical training to interfere in the selection of hardware and software necessary for the implementation of the system, thus avoiding exaggerated expenses in the purchase of these components.

2. THE IMPORTANCE OF PILOT PROJECTS

The use of pilot projects in the implementation of an MRP II system is extremely important in the sense that, in this way, the system's learning curve can be traversed without problems such as a drop in efficiency and loss of confidence on the part of team members. organization.

Habeck divides the pilot project into three stages, as shown in Table 1.

The area chosen as a user of the pilot project should be a model for the rest of the organization, being composed of some highly respected members.

The results of each stage of implementation must be disclosed and even eventual failures can be rewarded according to the level of commitment shown by the professionals involved.

3. CONCLUSION

In this article we cover the ten most common critical factors for the successful implementation of MRP II systems, detailing their technical and human implications on the various departments of the organization. Many variables must be analyzed in an integrated manner, never in isolation, such as: complexity of structures and variability of lead-times involved, degree of centralization of decision-making, etc. (Côrrea, 1993).

All care must be dedicated to the process of implementing an MRP II system, with several cases of failure due, basically, to the lack of sufficient attention to points such as education, training, organizational commitment and implementation management.

BIBLIOGRAPHY

Ang, James SK et al, “Critical Success Factors in Implementing MRP and Government Assistance: A Singapore Context”, Information Management, Vol. 29, 1995, pp.63-70.

Carr, David K.; Littman, Ian D., Excellence in Public Services, Total Quality Management in the 90s, Rio de Janeiro, Qualitymark, 1990.

Correa, Henrique L.; Gianesi, Irineu GN, Just in Time, MRP II and OPT – Um Enfoque Estratégico, São Paulo, Atlas, 1993.

Habeck, Milton et al., Restructuring Your Business to Maximize Your Profits and Satisfy Your Customers, Unbeaten Path International, 1996.

Melo, Denise A., “Discussion on the Problem at the Interface between the Marketing and Production Functions”, Produção, Vol.5, No.1, 1995, pp.79-90.

Taylor, Mac Exon, “Beyond MRP: The Development of a Modern Scheduling System”, Logistics Information Management, Vol.8, No.1, 1995, pp.17-23.