Visual ReOrder (VRO)
Olivier Rethore
"We have spent 60 years trying to calculate the best quantity to order and we have forgotten completely to define how to order it... VRO is an other quest: the quantity to order is not the goal, but it is the control of the procurement process through a very detailled ordering method."
Olivier Rethore
Since the beginning of the 60 ', with the deployment of MRP systems, companies have focused on optimizing their procurement plans, i.e. how to define the best ordered quantities at the right time. But only some of these companies were checking whether suppliers were able to deliver them.
In the late 60s the concept MPR2 was presented as the solution to verify if these orders were feasible. Indeed, by using as input the suppliers capacity in the system, MRP was able to compare them with computed loads.
The use of this solution is understandable at that time. Indeed, calling a supplier overseas in the '60s was not really easy. The time waiting to be connected manually by an operator was lasting for hours! Therefore it was more efficient to simulate locally the load situation of a supplier.
Today, times have changed, providers have adjusted their production and have optimized their capacities on order answer effectively to the needs of the market. The production lines are less dedicated to a specific product or a customer. This made impossible the available capacity computing for a part number at a given period.
Of course, capacity models are increasingly complex and ERPs have been enhanced to take into account this new fact. But consequences are obvious: more data to enter in the systems, to be maintained and of course more people to manage this activity ... which is not usually what companies are doing. The result is therefore generaly worse: not enough people to maintain the data which means that the ERP results may be wrong and therefore useless for controlling the procurement order process.
But since the 60s, communications have been improved. Calling someone in another continent is no longer a problem. We therefore propose another way to check if your procurement plans are feasible: you just have to ask suppliers to confirm if they are able to deliver orders! Not at the time of shipment, because it's too late to react, but after they have received their procurement orders.
Complicated? No, if you organize this process in a simple manner. It is what we call the Visual ReOrder.
VRO defines a human organization, tasks timing and responsibilities. It is based on your demand and the transportation schedule between your suppliers and you.
VRO is resulting from an FMEA of the procurement order activity. It includes a PDCA approach and gives a simple and operational solution to close the loop of the ordering process.
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