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Articles

When Attending an APICS NYC-LI Chapter CPIM Course!

  • Increase your functional knowledge of production and inventory management.
  • Maximize ROI on the systems and technologies within your organization.
  • Master the tools you need to effectively manage global supply chain activities
  • Gain knowledge to apply principles ERP software to cover various critical functions within your organization.
  • Earn customer satisfaction by delivering Lean/Just-in-Time products and services
  • Enhance your credibility within your organization
  • Create consistency and foster collaboration through best practices, common terminology, and corporate-wide communication.

                        For more info ------>  www.apicsnyc-li.org

Closing the Loop

Interactions with other systems, and feedback to verify the material plan, that is, closing the loop, identifies the interrelationships between this process & other elements of the operations planning & control systems.

The time required for material requirements planning (MRP) implementation varies from user to user. Keep in mind that installing, changing, and operating MRP is complex. It’s easy and dangerous to underestimate the time and attention that MRP requires of everyone in detailed scheduling and planning. Everyone is responsible for all the material planning parameters. When valid lead times, safety stocks, lot sizing, and other planning parameters are used, MRP is efficient. When the planner reschedules open orders in a timely manner, MRP is efficient. Timely transaction processing is also critical to ensure the effectiveness and accuracy of MRP.

On the other hand, organization inattention, inaction, or negligence will drive MRP to inefficiency.

MRP feeds planned orders directly into the capacity planning system. Capacity planning verifies the material plan. The material plan may balance. Nevertheless, if there isn’t enough capacity to process the material anywhere in production, the material plan won’t work. When you plan material, capacity planning becomes a reality-check for the material plan.

Detailed scheduling  and planning operates closely with many other parts of the business enterprise. Product planning and scheduling, engineering, inventory management, production, purchasing, and sales all have direct, two-way relationships with MRP.

Changes to the master schedule are some of the most common events that affect MRP plans. Planners design time fences to discourage master production schedule (MPS) because of capacity imbalances, it is necessary to execute both MRP and capacity requirements planning (CRP) to see if the changes produced the desired result.

Engineering changes may revise the relationships between items in the bills of material. Good engineering changes attempt to phase changes in planning them well ahead of time. Engineering change orders need to consider part availability and plan an orderly, cost effective change over. Some scenarios call for immediate change over. Examples include safety or quality issues and government mandates.

Production planning produces planned orders and capacity adjustments for purchasing, production, and sales. However, there is feedback from these activities. Cycle counting may change item on-hand balances. Scrap factors and lot sizes change. Time permitting, the MPS should reflect customer, MRP or CRP initiated changes. Supplier and production problems change scheduled receipts.

If demand forecasts or customer orders in the master production schedule are inaccurate, the material plan will be a fantasy. Customer orders will go unfulfilled and unused inventory will accumulate. Conversely, the master scheduler needs feedback on any imbalances in the material plan coming from the master production schedule.

MRP requires well-structured, accurate bills of material from engineering. Operations scheduling & planning need to coordinate product revisions or revisions of the bill of material with engineering. Together, they need to plan the runout dates for parts that will undergo engineering changes.  Planners need to work to deplete old components and raw materials, otherwise, obsolete inventory will result. The exception to this rule is when a change involves health or safety.  In this case, the part should be changed & possible retrofitted.

MRP needs accurate inventory records. It provides inventory management with the material plans, the foundation of the inventory plan. It also plans factory floor & purchasing make-and-buy orders. It ensures that purchased material and parts will be available in the right amount and at the right time. In return, MRP needs accurate and timely notices of any changes to scheduled receipts.

The operations scheduling and planning challenge for today and into the future, will be to extend material planning into our enterprise’s supply chain. It’s to everyone’s advantage to share our plans for purchased material with our vendors.     

If the above resonates with you, please see our course that covers all above, the Basics of Supply Chain Management (BSCM) on  www.apicsnyc-li.org.