Exception reporting provides time savings and insights

The entire handling of this new kind of MRP and all calculation results, and intermediate results, are thus recorded in detail in the ERP database. Consequently, almost any form of analysis reporting of the results, be they the cross-sections of demand on the one hand, or the coverage on the other, can be made. The reporting can then be organized in such a way that only the exceptions are reported, and the orders that can be fully covered are not reported separately again.

A material planner and/or a buyer then only has to invest time and energy in the exceptions and not in the things that are running well. The additional benefit is that a material planner and/or purchaser can work in a very focused way and solve material planning and control problems much easier and faster than with the one type of Planned orders from standard MRP.  The well-known 80-20 rule[1] would most likely apply, i.e., 20% exceptions or special situations to report, in which to invest 80% of his or her time, while 80% continues as ‘business as usual’ without any problems.

It will make questions such as, which Purchase Orders have actually become redundant after running the analysis because there is not a single sales order or work order in the system that requires the materials or components on the Purchase Order line, relatively simple to answer.

All Purchase Orders in the ERP system that should still be delivered but where no requesting order is noted in the Purchase Order line next to the item number, where the ‘to’ or ‘where to’ information is missing, could be selected on an exception report that filters on this.

All data (read: Purchase Orders) that appear on this exception report qualify for further analysis because they are apparently no longer needed. This raises the question why were the Purchase Orders created in the system, and perhaps also by whom, and what value do they represent. This does, of course, only apply to those Purchase Orders which have not yet been delivered by the supplier.  Purchasing items that are not actually required is not a useful activity for a business organization, especially considering the cost of stock.

[1] https://www.investopedia.com/ask/answers/050115/what-are-some-reallife-examples-8020-rule-pareto-principle-practice.asp