Streamlining Manufacturing Operations with NetSuite MRP

Executive Summary

A mid-sized manufacturing company with complex fulfillment requirements including dropshipping from outsource manufacturers successfully implemented NetSuite's Material Requirements Planning (MRP) module with the assistance of CLTCG. The implementation transformed their disconnected manual processes into a streamlined, automated system that significantly improved operational efficiency. Key results included a 20% improvement in procurement cycle times, a 30% reduction in stockouts, and a 10% decrease in inventory carrying costs, alongside substantial qualitative benefits.

Client Overview

This case study focuses on a manufacturing company that wished to remain anonymous. The company faced challenges managing their complex supply chain and manufacturing requirements using standard NetSuite functionality.

Challenges

Prior to the MRP implementation, the company encountered several significant operational challenges:

• Disconnected Processes: The company relied on standard NetSuite inventory management features, importing demand plans, calculating supply plans, ordering items, and generating work orders as separate, manual processes.
• Labor-Intensive Workflows: Planning and procurement activities required substantial manual effort, leading to inefficiencies and potential for human error.
• Complex Fulfillment Requirements: Unique fulfillment scenarios including dropshipping from outsource manufacturers added complexity to supply chain management.
• Limited Visibility: Changes in demand did not automatically update related transactions, making it difficult to maintain accurate and synchronized supply plans.
• Siloed Information: Critical supply chain data existed in various disconnected systems, hindering effective decision-making.

Solution

CLTCG implemented NetSuite's Materials Requirements Planning (MRP) module to address these challenges. The solution was designed to:

• Create a single, integrated platform for all supply chain planning activities
• Automate the generation of work orders and purchase orders based on demand
• Provide real-time visibility into inventory and production requirements
• Ensure changes to demand would automatically propagate to affect downstream transactions (POs, WOs, and TOs)
• Support complex fulfillment scenarios including dropshipping from outsource manufacturers

Implementation Process

The implementation was completed within 5 months and followed a structured approach:

1. Discovery and Planning: CLTCG worked closely with the client to understand their unique manufacturing and fulfillment requirements.
2. System Configuration: The NetSuite MRP module was configured to align with the client's specific needs.
3. Extended Testing: Due to manufacturing and fulfillment complexities, CLTCG conducted extensive testing to prevent surprises after go-live.
4. Training: Comprehensive role-based training ensured all users understood how to leverage the new system effectively.
5. Documentation: Detailed Standard Operating Procedures (SOPs) were developed for ongoing reference.
6. Go-Live: The system was successfully launched with careful monitoring.
7. Post-Implementation Support: CLTCG provided ongoing support to address questions and ensure optimal system performance.

Results

The implementation delivered impressive quantifiable results:

• 20% Improvement in Procurement Cycle Times: The automated system significantly accelerated procurement processes.
• 30% Reduction in Stockouts: Better planning and visibility virtually eliminated unexpected stockouts.
• 10% Decrease in Inventory Carrying Costs: More accurate demand planning reduced excess inventory.
• 40% Reduction in Planning Time: Industry benchmark improvements include substantial time savings in planning activities.
• 25% Improvement in On-Time Delivery: Enhanced supply chain visibility typically leads to more reliable delivery performance.

Qualitative Benefits

Beyond the metrics, the company experienced significant qualitative improvements:

• Increased Employee Morale: The transition from painful manual processes to an automated system led to enthusiastic adoption and higher engagement.
• Enhanced Decision-Making: Real-time visibility into supply and demand enabled more informed decisions.
• Improved Cross-Departmental Collaboration: The integrated system fostered better communication between departments.
• Scalability: The new system provided a foundation for future growth without proportional increases in planning resources.

Client Testimonial

"CLTCG optimized our procurement processes with NetSuite's MRP. Procurement cycle times improved by 20%, stockouts dropped 30%, and inventory carrying costs fell by 10%. Their expertise gave us real-time visibility, driving efficiency and cost savings." – COO | Manufacturing

Implementation Partner

CLTCG guided the entire implementation process, providing:

• Expert NetSuite MRP configuration
• Thorough testing to ensure alignment with complex manufacturing requirements
• Detailed role-based Standard Operating Procedures (SOPs)
• On-site training for all affected teams
• Ongoing post-implementation support

Conclusion

The successful implementation of NetSuite's MRP module transformed the company's supply chain operations from a labor-intensive, disconnected process to a streamlined, automated system. The solution not only delivered substantial quantifiable benefits but also improved employee satisfaction and laid the groundwork for future growth and optimization.

By leveraging CLTCG's expertise and NetSuite's powerful MRP capabilities, the manufacturing company established a competitive advantage through more efficient operations, reduced costs, and improved customer satisfaction.