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Focus on Material Planning for Scrap Reduction

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Our decision to go for NAV was largely because of the cost factor. It offered a better price-value proposition vis-à-vis other solutions.

Being operative in the SMB market and being an investment led e-Commerce Company – it is really very tough to think about the decision of implementing a high end solution such as an SAP or an Oracle ERP – just because of the fear of the cost of licenses.

Besides, we would have also not liked to have such kind of competency in terms of capability of people to manage those high end ERP systems because that would again change our cost in a different manner altogether.

So, Microsoft Dynamics NAV, been specialized only for SMB was the right decision to go for. And that was the main idea behind the decision of moving to NAV.

Although we are yet to reap any visible benefits from implementing NAV, other ecommerce companies under the Smile grWith ERP, we have been able to put MRP (Material Requirement Planning) into place, which in turn has improved our production efficiency and significantly reduced scrap. For example, before we commence production, a bill of material is prepared. Before getting an ERP, we never had an accurate material requirement plan and the BOM was made merely based on a rough estimate of the quantities of items required for production. However, the deviation between the estimate and actual was considerably large to ignore. Also the kind of material that we use, such as seat cushions, once put into the assembly were either used or scraped. This resulted in losses due to wastage.

ERP has helped resolve this problem. Now that we can plan our material requirement in advance, the accuracy of BOMs has increased. The amount of material that enters the assembly is just the amount that is required for production. This ensures that little or no material gets written off.

So, we have been able to significantly simplify production planning and scheduling while keeping costs optimum. We prepare the gross requirement plan depending on the desired output.

Besides, we are able to maintain optimum inventory levels by creating accurate requirement projections for material purchase – thus improving the efficiency of MRP cycle. We now know when to place an order, how much quantity to be ordered and the days to go before the delivery.oup – who have also been using NAV – have recorded measurable benefits.

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