The people side of MRP (materiel requirements planning)

A montage of ideas and concepts have been successfully used to train and motivate people to use MRP II systems more effectively. This is important today because many companies are striving to achieve World Class Manufacturing status. Closed loop Materiel Requirements Planning (MRP) systems are an integral part of the process of continuous improvement. Successfully using a formal management planning system, such as MRP II, is a fundamental stepping stone on the path toward World Class Excellence. Included in this article are techniques that companies use to reduce lead time, simplify bills of materiel, and improve schedule adherence. These and other steps all depend on the people who use the system. The focus will be on how companies use the MRP tool more effectively.     

How to unlock the benefits of MRP (materiel requirements planning) II and Just-in-Time

Manufacturing companies need to use the best and most applicable parts of MRP II and JIT to run their businesses effectively. MRP II provides the methodology to plan and control the total resources of the company and focuses on the processes that add value to their customers' products. It is the cornerstone of total quality management, as it reduces the variability and costly activities in the communication and subsequent execution of the required steps from customer order to shipment. JIT focuses on simplifying the total business operation and execution of business processes. MRP II and JIT are the foundations for successful manufacturing businesses.     

Integrating MRP (materiel requirements planning) II and JIT to achieve world-class status

The concepts and principles of using manufacturing resource planning (MRP II) for planning are not new. Their success has been proven in numerous manufacturing companies in America. The concepts and principles of using just-in-time (JIT) inventory for execution, while more recent, have also been available for some time, and their success in Japan well documented. However, it is the effective integration of these two powerful tools that open the way to achieving world-class manufacturing status. This article will utilize a newly developed world-class manufacturing model, which will review the aspects of planning, beginning with a business plan through the production planning process and culminating with a master schedule that drives a materiel/capacity plan. The importance and interrelationship of these functions are reviewed. The model then illustrates the important aspects of executing these plans beginning with people issues, through total quality control (TQC) and pull systems. We will then utilize this new functional model to demonstrate the relationship between these various functions and the importance of integrating them with a total comprehensive manufacturing strategy that will lead to world-class manufacturing and profits.     

The road to business process improvement--can you get there from here?

Historically, "improvements" within the organization have been frequently attained through automation by building and installing computer systems. Material requirements planning (MRP), manufacturing resource planning II (MRP II), just-in-time (JIT), computer aided design (CAD), computer aided manufacturing (CAM), electronic data interchange (EDI), and various other TLAs (three-letter acronyms) have been used as the methods to attain business objectives. But most companies have found that installing computer software, cleaning up their data, and providing every employee with training on how to best use the systems have not resulted in the level of business improvements needed. The software systems have simply made management around the problems easier but did little to solve the basic problems. The missing element in the efforts to improve the performance of the organization has been a shift in focus from individual department improvements to cross-organizational business process improvements. This article describes how the Electric Boat Division of General Dynamics Corporation, in conjunction with the Data Systems Division, moved its focus from one of vertical organizational processes to horizontal business processes. In other words, how we got rid of the dinosaurs.     

生产物流计划和控制方法的研究

许多文献都集中于MRP、N和OPT，但TDC很少有人提到．近年来，随着电子计算机技术的发展，越来越多的研究人员致力于用计算机技术结合MRP、JIT和OPT的思想解决问题．本文给出了TOC和ANN的简单介绍并将它们结合，使用Hopfield网施实生产计划．     

基于企业社会责任理论顾客满意度模型的研究

自从顾客满意的概念的提出之后,各方专家学者根据自己的见解,建立了不同的顾客满意度模型。但是,这些模型只是从某些方面解释了如何提高顾客满意度。而且,有的模型已经不能适应当前社会的发展。很多企业想通过这些模型来提高顾客满意度,最终的效果却很不理想。究其原因,是由于社会的高速发展,顾客的范围不断变化,而这些企业没有更深入地对顾客的概念进行发掘和认识。所以,文章通过对顾客这一概念的重新理解,结合企业社会责任理论,将顾客进行分类,并且对隐藏型顾客做出详细的阐述。在原有的顾客满意度模型的基础之上,文章提出了一种更为全面的顾客满意度模型。     

A heuristic algorithm for capacity sensitive requirements planning

Available lot sizing rules for use in MRP (Material Requirements Planning) systems ignore capacity limitations at various work centers when sizing future orders. Planned order releases are instead determined by the tradeoff only between the item's set up and inventory holding costs. This limitation can cause unanticipated overloads and underloads at the various work centers, along with higher inventories, poorer customer service, and excessive overtime.This research explores one way to make MRP systems more sensitive to capacity limitations at the time of each regeneration run. A relatively simple heuristic algorithm is designed for this purpose. The procedure is applied to those planned order releases that standard MRP logic identifies as mature for release. The lot sizes for a small percentage of these items are increased or decreased so as to have the greatest impact in smoothing capacity requirements at the various work centers in the system. This algorithm for better integrating material requirements plans and capacity requirements plans is tested with a large scale simulator in a variety of manufacturing environments. This simulator has subsequently undergone extensive tests, including its successful validation with actual data at a large plant of major corporations.Simulation results show that the algorithm's modest extension to MRP logic significantly helps overall performance, particularly with customer service. For a wide range of test environments, past due orders were reduced by more than 30% when the algorithm was used. Inventory levels and capacity problems also improved. Not surprisingly, the algorithm helps the most (compared to not using it at all as an MRP enhancement) in environments in which short-term bottlenecks are most severe. Large lot sizes and tight shop capacities are characteristic of these environments. The algorithm works the best when forecast errors are not excessive and the master schedule is not too “nervous.”This proposed procedure is but one step toward making MRP more capacity sensitive. The widely heralded concept of “closed-loop” MRP means that inventory analysts must change or “fix up” parts of the computer generated material requirements plan. What has been missing is a tool for identifying the unrealistic parts of the plan. Our algorithm helps formalize this identification process and singles out a few planned order releases each week. This information comes to the analyst's attention as part of the usual action notices. These pointers to capacity problems go well beyond capacity requirements planning (CRP) and would be impossible without computer assistance.Our study produced two other findings. First, short-term bottlenecks occur even when the master production schedule is leveled. The culprits are the lot sizing choices for items at lower levels in the bills of material. “Rough-cut” capacity planning, such as resource requirements planning, therefore is not a sufficient tool for leveling capacity requirements. It must be supplemented by a way to smooth bottlenecks otherwise caused by shop orders for intermediate items. Second, the disruptive effect of large lot sizes is apparent, both in terms of higher inventories and worse customer service. Large lot sizes not only inflate inventories, but paradoxically hurt customer service because they create more capacity bottlenecks. The only reason why management should prefer large lot sizes is if set-up times are substantial and cannot be efficiently reduced. This finding is very much in step with the current interest in just-in-time (JIT) systems.     

Read my lips--no more late deliveries

Over 70,000 materiel requirements planning (MRP) and manufacturing resource planning (MRP II) systems have been implemented in this country in the last 20 to 30 years. Yet the question many of the companies who own these systems are asking is, "Was it worth it?" Less than a third of the companies are answering in the affirmative. Two key differences between the satisfied and the not-so-satisfied companies are (1) support to the user community and (2) management involvement in the day-to-day use of the system. Without these two items, the improvements brought about by an MRP or MRP II system will most likely be mediocre at best.     

Overlapping operations in material requirements planning

Material requirements planning (MRP) is a planning and information system that has widespread application in discrete-parts manufacturing. The purpose of this article is to introduce ideas that can improve the flow of material through complex manufacturing systems operating under MRP, and that can increase the applicability of MRP within diverse manufacturing environments.MRP models the flow of material by assuming that items flow from work station to work station in the same batches that are used in production. That is, once work starts on a batch of a certain item at a certain work station, the entire batch will be produced before any part of the batch will be transported to the next work station on its routing plan. Clearly, efficiency can be increased if some parallelism can be introduced. The form of parallelism investigated here is overlapping operations.Overlapping operations occurs when the transportation of partial batches to a downstream work station is allowed while work proceeds to complete the batch at the upstream work station. The potential efficiencies to be gained are the following:

• Reduced work-in-process inventory

• Reduced floor space requirements

• Reduced size of transfer vehicles

Additional costs may accrue through additional cost of transportation of partial batches and through additional costs of control.Some MRP software vendors provide the data processing capability for overlapping operations. However, the user is given little or no guidance on overlapping percentages or amounts. It is our intent to provide a simple, robust technique to MRP users who would like to overlap operations and gain some or all of the above efficiencies.An optimal lot-sizing technique is derived by considering a generic two work station segment of a manufacturing system. Under the assumptions of constant demand and identical production rates, a cost function that considers setup costs, inventory holding costs and transportation costs is derived. This cost function is minimized subject to the constraint that the production batch is an integer multiple of the transfer batch. We solve for the optimal production batch, the optimal transfer batch, and the integer number relating them. Solutions are obtained as closed form, easy to-evaluate formulas.By introducing more parallelism, overlapping operations can reduce lead time. However, this will not happen without modification of MRP logic to accommodate such reduced lead time. We derive a formula that shows how a significant lead time compression can easily be obtained and implemented in MRP.We consider an example to illustrate the application of the technique on typical data from the electronics industry. The outcome showed a cost savings of approximately 22.5% over the standard MRP approach.Overlapping operations allows the applicability of MRP to an increasing number of situations that are not modeled faithfully by conventional MRP logic. Three such situations that occur often are the following:

• Limited size of transfer vehicles dictate that several transfers should be planned.

• Lead time requirements prohibit nonoverlapped operations.

Our analysis suggests how to accommodate these difficult practical situations into MRP.Overlapping operations in material requirements planning provides an enhancement that allows wider applicability, shortened lead times, and lower total costs. It may be applied selectively to any two work stations where it is deemed appropriate. Due to the structure of the cost function, it is possible to make the transfer lot-sizing decisions independent of the production lot-sizing decisions. Therefore, significant improvements can be made through overlapping with minimum disruption to the existing MRP system machinery. It is our conviction that overlapping operations is an important concept that can and will impact MRP. We suggest the approach presented here as a systematic way to implement overlapping.     

The cost of inflated planned lead times in MRP systems

Much of the current literature in the field of production and inventory control systems stresses the need to revise traditional forms of thinking regarding production processes, the role of inventories for work in process, and the need for reduced lead times or flow times. Group technology, manufacturing cells, and other means of incorporating repetitive manufacturing techniques into traditional job-shop settings constitute the leading edge in system development.Still, there is resistance to these dramatic changes, and traditional “business as usual” methods still predominate. This study attempts to illustrate graphically the cost justification associated with reduction in lead times which generally results from these new concepts. In most job shops today, lead times are much longer than they need to be due to inflation of lead time estimates. Actual lead times for the manufacture of fabricated and assembled products have been shown to be a direct consequence of the planning lead times used in the MRP planning process—a form of self-fulfilling prophesy.The research employs a simulation model of a factory using MRP as a planning tool in a multiproduct, multilevel production environment. Manufacturing costs constitute the dependent variable in the experiments, defined as the sum of material costs (including expedite premiums), direct labor costs (including overtime premiums), inventory carrying costs, and overhead costs. The independent variable being manipulated is the planned lead time offset used in the MRP planning process. Twenty values of planned lead time are evaluated ranging from a value that includes no slack time at all (pure assembly line) up to a value that allows 95% slack (queue) time which, unfortunately, is not uncommon in many job shops today. Stochastic variables in the model include customer demand and actual processing times—the sum of set-up and run times.The result of the study is a cost curve formed over the range of independent lead time variables that is constructed using nonlinear regression techniques. The conclusions from the resultant graph clearly indicate the cost consequences of long lead times, with exponential cost increases beyond the 80–90% queue time level. Total costs are 41% higher at the maximum lead time allowance compared to the minimum. Clearly, this study demonstrates the need for lead time reduction, either through downward adjustment of MRP planned lead times or by introducing new manufacturing concepts.     

Inventory management in the just-in-time age

JIT will change our conventional thinking concerning the management of inventories and streamline our methods for inventory control. Proper selection and implementation of these methods will yield substantial benefits by improving customer service, shortening delivery lead times, and significantly reducing inventory investment. It does not, however, eliminate the need for sound inventory planning.     

汽车配件企业安全库存设置

整车厂商JIT要求对上游的汽车配件生产企业快速响应,汽车配件生产企业为了满足整车厂商的突发性需求与消除本企业内部影响生产平稳的一些不确定因素,也是为了取得比较好的客户满意率,因此对安全库存的研究显得极为重要。文章借助于统计学方面的一些知识和专门的统计软件SPSS对汽车配件生产企业的采购提前期和需求量进行了分析,旨在得出适合汽车配件生产企业的安全库存和再订货点的设置方法。     

Resolving uncertainty in manufacturing systems

This paper examines the effectiveness of three commonly practiced methods used to resolve uncertainty in multi-stage manufacturing systems: safety stock under regenerative material requirements planning (MRP) updates, safety capacity under regenerative MRP updates, and net change MRP updates, i.e., continuous rather than regenerative (periodic) updates. The use of safety stock reflects a decision to permanently store materials and labor capacity in the form of inventory. When unexpected shortages arise between regenerative MRP updates, safety stock may be depleted but it will be replenished in subsequent periods. The second method, safety capacity, overstates the MRP capacity requirements at the individual work centers by a prescribed amount of direct labor. Safety capacity either will be allocated to unanticipated requirements which arise between MRP regenerations or will be spent as idle time. The third method, net change, offers a means of dealing with uncertainty by rescheduling instead of buffering, provided there is sufficient lead time to execute the changes in the material and capacity plans.Much of the inventory management research has addressed the use of safety stock as a buffer against uncertainty for a single product and manufacturing stage. However, there has been no work which evaluates the performance of safety stock relative to other resolution methods such as safety capacity or more frequent planning revisions. In this paper, a simulation model of a multi-stage (fabrication and assembly) process is used to characterize the behavior of the three resolution methods when errors are present in the demand and time standard estimates. Four end products are completed at an assembly center and altogether, the end products require the fabrication of twelve component parts in a job shop which contains eight work centers. In addition to the examination of the three methods under different sources and levels of uncertainty, different levels of bill of material commonality, MRP planned lead times, MRP lot sizes, equipment set-up times and priority dispatching rules are considered in the experimental design.The simulation results indicate that the choice among methods depends upon the source of uncertainty, and costs related to regular time employment, employment changes, equipment set ups and materials investment. For example, the choice between safety stock and safety capacity represents a compromise between materials investment and regular time employment costs. The net change method is not designed to deal effectively with time standard errors, although its use may be preferred over the two buffering alternatives when errors are present in the demand forecasts and when the costs of employment changes and equipment set ups are low. The simulation results also indicate that regardless of the method used, efforts to improve forecasts of demands or processing times may be justified by corresponding improvements in manufacturing performance.     

Purchasing in a supply chain environment

Why the interest in purchasing? In the typical company, material costs are 40% to 75% of the cost of goods sold, labor is 5% to 15%, and the balance is burden. The typical company has $4-$5 in purchased cost to $1 in labor. Most companies are implementing material requirements planning (MRP II) and enterprise resource planning systems to control the $1 in labor and have little expectation in the area of purchasing savings. Yet a dollar saved in purchasing goes directly to the bottom line. I ran a survey of 100 Class A users of MRP II; in all 100 of the companies, the biggest payback was in the area of purchasing.     

The production performance benefits from JIT implementation

The intense competition in the current marketplace has forced firms to reexamine their methods of doing business. The US manufacturers have struggled with growing trade deficits and outsourced operations, while strong market competitors have emerged, using superior manufacturing practices in the form of just-in-time (JIT) and continuous process improvement. Although proponents cite the many benefits of JIT adoption, its implementation rate in the US has been relatively conservative. This study uses survey responses from executives at 95 JIT-practicing firms to better understand the benefits that firms have experienced through JIT adoption, and whether a more comprehensive implementation is worthwhile. The research results demonstrate that implementing the quality, continuous improvement, and waste reduction practices embodied in the JIT philosophy can enhance firm competitiveness. JIT implementation improves performance through lower inventory levels, reduced quality costs, and greater customer responsiveness. This study indicates that JIT is a vital manufacturing strategy to build and sustain competitive advantage.     

The impact of sourcing enterprise system use and work process interdependence on sourcing professionals’ job outcomes

We examine sourcing professionals’ work context to conceptualize how they use sourcing enterprise systems (SESs) and to understand when SES use results in positive/negative job outcomes. We differentiate between SES use for supplier selection and supplier governance, identify sourcing professionals’ work process interdependence as a moderator for the impacts of SES use on job satisfaction, and suggest job satisfaction mediates the impacts of SES use on job performance. We conducted a field study of sourcing professionals’ SES use at one of the largest consumer product companies in the United States, which has implemented an SES to innovate its sourcing professionals’ work processes. Based on our analysis of the survey and qualitative data we collected, we found the impacts of both types of SES use (1) to be negative on job satisfaction when work process interdependence was high, (2) to be positive on job satisfaction when work process interdependence was low, and (3) to be mediated by job satisfaction for job performance. We discuss the implications of our findings for the literature at the intersection of information systems and operations management as well as for the information technology enabled innovation of sourcing processes and, more generally, complex business processes.     

让每个平方米的仓储收益多起来

相对西方发达国家,中国的仓储服务业具有占地面积大、自动化程度低、投资回收期长、仓储服务普遍处于微利等行业特点.在当今中国物流“外包“需求不断上升、生产性客户普遍追求企业“零库存“的市场背景下,同时还面临着仓储用地资源日益紧缺,仓储企业竞争压力不断加大的新形势.如何提升仓库每个平方米的收益,如何探索差异化增值服务来增强仓储部门的竞争能力,文中从仓储服务中的业务延伸、时间管理等方面进行了一些有益的实践探索和初步的理论研究,对改善仓储服务、提升传统仓储业的竞争能力都将具有显著的现实意义和战略管理借鉴意义.     

Managing the performance of outsourced customer contact centers

This research focuses specifically on customer contact services that have been outsourced to external suppliers. The performance of the contact services supplier directly affects end customer satisfaction which underlines the need for appropriate management of customer contacts and consideration of the end customer's perspective in designing appropriate key performance indicators (KPIs). This research draws on various streams of literature including services purchasing, performance management and service quality to derive propositions on how to manage customer contact services suppliers. These propositions are subsequently investigated in an in-depth case study. The results of the case study show that managing customer contact services suppliers on effectiveness rather than efficiency benefits the overall performance of the supplier. This research shows that quality improvements in both process and service delivery ultimately lead to decreased costs. These improvements will furthermore enhance customer satisfaction and improve buying company performance. The current trend in selecting and managing suppliers for outsourced business processes is on efficiency improvements and cost savings. However, this research shows that this type of focus can actually decrease customer satisfaction and increase costs.     

Just-in-time in the infrastructure

We know that just-in-time (JIT) manufacturing is a set of philosophies, not a set of techniques. These same philosophies are embraced by the total quality management (TQM) school. The most important element of this philosophy is that of continuous improvement--the acceptance of constantly changing objectives as a departure from reliance on standard requirements. This fundamental concept drives other philosophical aspects such as improving utilization of resources (employee involvement, reduction of waste) and long-term success (customer focus, vendor partnerships). Clearly, these philosophies are applicable to all organizations and functions. Perhaps some of these philosophies are manifest by certain JIT principles that we might consider when we design organizational routines and practices. Why not apply what has been proven in the factory to the seemingly bureaucratic behaviors in the office.