Min's are definitely the most desireable (long term) way to go with the conditions you describe.
Forecasts are customer/independent demand specific and Master Schedules are independent demand specific (so neither sounds of much use to you.)
I'd be surprised if you really need a "Min phase in" plan... If your company is like every other manufacturer I've ever worked for (or dealt with) the '80/20 rule' will apply: 20% (at most) of your 7,000 SKUs experience the critical 80% of demand (which you wish to increase your customer service levels on).
After some mass analysis of historical demand for a all SKUs, you'll probably find that the presence or absence of available on-hand inventory for less than 1000 of them really will have an impact on your gross customer service levels.
You'll want to look at it from a couple of angles:
Pure usage history (translated into inventory usage cost & resource specific capacity requirements over time to fulfill the historical usage rate).
Sold item BOM data: There is no sense investing in stocked ijnventory asset of 9 of 10 components needed to complete popular sold parts if fulfillment of customer orders will still be held hostage while awaiting supply of the 10th component. (Make sure you plan to have balanced inventory levels of matched sets of parts for your most popular sold items.)
Also make sure you are looking at the total component lead time (through the entire multi-level BOM structure - if your products have this condition) and production resource requirements to meet historical demand rates. Sometimes a single multi-level BOM leg needs to be planned to be Min O/H stocked at a mid-BOM level to maintain acceptable customer service levels (even if the end component does not fall into the "80% of demand" category) OR to prevent resource contention when requirements for the components do occur.
Each BOM level may require the same resources to process (so production is serial - and no overlapping flow production can be set in motion) - OR - the resource load from the occasional requirements is significant enough that it will impact your regular production/replenishment plans for your bread-and-butter items you have decided to maintain inventory on. In those cases, some 'as-possible' preproduction of low key, resource-clogging use items will reduce disruption of other key item planned supplies (and make you more financial efficient in the long run).
Beth Castillo <dentonatd@...> wrote:
Thanks for the reply. Most of the 7000 component parts have demand from both sales orders and jobs (probably about 65% of them). The decision has been made not to use a Master Schedule or a Forecast. Our sales orders act as our "master schedule".
I think it is worth investing the time to enter proper minimum on hand quantities for these components. I'd like to enter them as our capacity permits so that we don't overwhelm our system. (Add minimum on hand quantities for just a few part numbers at a time. Then create the jobs, run the parts, and put them into stock. Then add a few more minimum on hand quantities and create jobs for those, and so on.) Does this approach make sense to you or to any other Vantage users?
Beth
Robert Brown <robertb_versa@...> wrote:
If the 7,000 Parts predominantly experience independent demand (sales order requirements) - Master Schedule. (The Master Scheduled qty's/period willl be 'consumed' by actual independent demand requirements/period as it is entered - and you will be able to differentiate in Time Phase between actual demand and planned demand.)
If the 7,000 Parts predominantly experience dependent demand (from Jobs), use of Min O/H target values and/or Safety is preferred.
Use of Jobs provides similar results as an MPS - but the Jobs aren't 'self adjusting' to real demand as it occurs. Unless you intend to continually edit the jobs to reduce the requirements they drive as REAL requirements are entered, you are setting yourself up for rendering MRP output to be useless (as it always will be wrong as a result of the unmanaged distortions caused by your 'fake' Job demand).
Beth Castillo <dentonatd@...> wrote:
I'm having a difficult time explaining to my company why using artificial demand from "fake" jobs to build stock may not be a good idea. I could use some help in this if anyone is willing.
Here is the situation. Our company has decided that we need to build up our inventory levels so that we can service our customers better. (I realize this is an old fashioned approach to the situation, but we are very far away from practicing lean concepts.) The directive has been given to me to create jobs for several end items using a past due date. This is because they want to force us to build inventory for the component part numbers that go into these end items. We do not have the capacity to run these component so the component jobs will fall past due. The thinking is that since the jobs have a past due date, we will know that they aren't needed for live orders. So if we don't have the capacity we can just skip over the past due jobs.
They've chosen this method over using the minimum on hand field because we only have to enter about 6 jobs to create the demand, rather than entering 7000 minimum on hand quantities. I haven't been able to convince them that even though this appears to be an easier way, it will create havoc with our jobs. We will not issue the components to the fake jobs for our end items. The fake jobs will never be closed. So the demand for the components will always show past due. Even if we had enough inventory on hand to cover the fake jobs, we will eventually use up this inventory. Then time phase will show us short to the "fake" jobs with the past due dates. This will force us to reschedule future jobs and change job quanitites continuously. It will make our schedules jumpy and make our dispatch reports difficult to use.
What other problems do you see with this approach? We are currently getting ready to buy the MRP module and I want to work this out before we install it. No sense in making a mess out of MRP before we even start.
Would we have the same problems if we used minimum on hand quantities instead?
Any thoughts?
Beth
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Forecasts are customer/independent demand specific and Master Schedules are independent demand specific (so neither sounds of much use to you.)
I'd be surprised if you really need a "Min phase in" plan... If your company is like every other manufacturer I've ever worked for (or dealt with) the '80/20 rule' will apply: 20% (at most) of your 7,000 SKUs experience the critical 80% of demand (which you wish to increase your customer service levels on).
After some mass analysis of historical demand for a all SKUs, you'll probably find that the presence or absence of available on-hand inventory for less than 1000 of them really will have an impact on your gross customer service levels.
You'll want to look at it from a couple of angles:
Pure usage history (translated into inventory usage cost & resource specific capacity requirements over time to fulfill the historical usage rate).
Sold item BOM data: There is no sense investing in stocked ijnventory asset of 9 of 10 components needed to complete popular sold parts if fulfillment of customer orders will still be held hostage while awaiting supply of the 10th component. (Make sure you plan to have balanced inventory levels of matched sets of parts for your most popular sold items.)
Also make sure you are looking at the total component lead time (through the entire multi-level BOM structure - if your products have this condition) and production resource requirements to meet historical demand rates. Sometimes a single multi-level BOM leg needs to be planned to be Min O/H stocked at a mid-BOM level to maintain acceptable customer service levels (even if the end component does not fall into the "80% of demand" category) OR to prevent resource contention when requirements for the components do occur.
Each BOM level may require the same resources to process (so production is serial - and no overlapping flow production can be set in motion) - OR - the resource load from the occasional requirements is significant enough that it will impact your regular production/replenishment plans for your bread-and-butter items you have decided to maintain inventory on. In those cases, some 'as-possible' preproduction of low key, resource-clogging use items will reduce disruption of other key item planned supplies (and make you more financial efficient in the long run).
Beth Castillo <dentonatd@...> wrote:
Thanks for the reply. Most of the 7000 component parts have demand from both sales orders and jobs (probably about 65% of them). The decision has been made not to use a Master Schedule or a Forecast. Our sales orders act as our "master schedule".
I think it is worth investing the time to enter proper minimum on hand quantities for these components. I'd like to enter them as our capacity permits so that we don't overwhelm our system. (Add minimum on hand quantities for just a few part numbers at a time. Then create the jobs, run the parts, and put them into stock. Then add a few more minimum on hand quantities and create jobs for those, and so on.) Does this approach make sense to you or to any other Vantage users?
Beth
Robert Brown <robertb_versa@...> wrote:
If the 7,000 Parts predominantly experience independent demand (sales order requirements) - Master Schedule. (The Master Scheduled qty's/period willl be 'consumed' by actual independent demand requirements/period as it is entered - and you will be able to differentiate in Time Phase between actual demand and planned demand.)
If the 7,000 Parts predominantly experience dependent demand (from Jobs), use of Min O/H target values and/or Safety is preferred.
Use of Jobs provides similar results as an MPS - but the Jobs aren't 'self adjusting' to real demand as it occurs. Unless you intend to continually edit the jobs to reduce the requirements they drive as REAL requirements are entered, you are setting yourself up for rendering MRP output to be useless (as it always will be wrong as a result of the unmanaged distortions caused by your 'fake' Job demand).
Beth Castillo <dentonatd@...> wrote:
I'm having a difficult time explaining to my company why using artificial demand from "fake" jobs to build stock may not be a good idea. I could use some help in this if anyone is willing.
Here is the situation. Our company has decided that we need to build up our inventory levels so that we can service our customers better. (I realize this is an old fashioned approach to the situation, but we are very far away from practicing lean concepts.) The directive has been given to me to create jobs for several end items using a past due date. This is because they want to force us to build inventory for the component part numbers that go into these end items. We do not have the capacity to run these component so the component jobs will fall past due. The thinking is that since the jobs have a past due date, we will know that they aren't needed for live orders. So if we don't have the capacity we can just skip over the past due jobs.
They've chosen this method over using the minimum on hand field because we only have to enter about 6 jobs to create the demand, rather than entering 7000 minimum on hand quantities. I haven't been able to convince them that even though this appears to be an easier way, it will create havoc with our jobs. We will not issue the components to the fake jobs for our end items. The fake jobs will never be closed. So the demand for the components will always show past due. Even if we had enough inventory on hand to cover the fake jobs, we will eventually use up this inventory. Then time phase will show us short to the "fake" jobs with the past due dates. This will force us to reschedule future jobs and change job quanitites continuously. It will make our schedules jumpy and make our dispatch reports difficult to use.
What other problems do you see with this approach? We are currently getting ready to buy the MRP module and I want to work this out before we install it. No sense in making a mess out of MRP before we even start.
Would we have the same problems if we used minimum on hand quantities instead?
Any thoughts?
Beth
---------------------------------
Yahoo! oneSearch: Finally, mobile search that gives answers, not web links.
[Non-text portions of this message have been removed]
---------------------------------
Moody friends. Drama queens. Your life? Nope! - their life, your story.
Play Sims Stories at Yahoo! Games.
[Non-text portions of this message have been removed]
---------------------------------
Luggage? GPS? Comic books?
Check out fitting gifts for grads at Yahoo! Search.
[Non-text portions of this message have been removed]
---------------------------------
Moody friends. Drama queens. Your life? Nope! - their life, your story.
Play Sims Stories at Yahoo! Games.
[Non-text portions of this message have been removed]