Let us begin our discussion by first attempting to define what World
Class Status really is—especially with regard to Manufacturing
Companies throughout the world and in America, who manufacture
products for sale. For want of a better definition, and I've heard
dozens, a World Class Manufacturing Company is a company that can
manufacture its product in its country, sell it anywhere in the
world at a competitive price and still make a profit. Some examples
of current American World Class Manufacturing Companies are: Xerox,
Black and Decker, Stanley Tool, HP, Remington, IBM, AT&T, as well as
numerous smaller, lesser known corporations.
Achievement of this status has, in most cases, come from the
successful integration of Manufacturing Resource Planning (MRP II)
and Just-In-Time (JIT). The utilization of MRP II as the
planning premises and JIT as the execution premise becomes the key
to successful achievement of World Class status.
Next, let's look at and discuss the concepts and principles of MRP
II. There is really nothing new in this area to focus on. Developed
in the 70's, the concepts and principles of MRP II have been around
for 20 years and most progressive manufacturing companies have made
some attempt to embrace it. Given that the level of success has been
wanting and that in some cases only specific pieces of the practices
have been attempted, such as Material Requirements Planning (MRP)
and Master Production Scheduling (MPS), the concepts and principles
are widely known and understood even by those who have not attempted
or succeeded. However, I feel it is important to the context of this
paper to review them.
A high-level corporate-wide plan for all areas of the company that
addresses such things as who are we, what are we, what business are
we in and why? Such things as market share and profitability must
also be determined here. The business plan is always done in
A forward-projected view of what we plan to sell, how many, to whom
and when, at least by product family, and then preferably down to
the code level, with options and features if applicable must be done
in Dollars and Units. It is commonly referred to as the forecast.
Applicable only when the manufacturing strategy for the product is
made to stock, this plan determines what is available in finished
goods inventories that can be allocated to present customer demand.
How much of it will be utilized to satisfy that demand and when and
if it is to be replaced in inventory. It too must be in both dollars
and units, but, must be at the individual code level, with specific
options and features since we are dealing here with packaged
What do we need to produce, either to satisfy customer demand or to
replace materials shipped from the Distribution Network. It
involves all organizations associated with the manufacturing process
including manufacturing, engineering, materials
management/purchasing, marketing/ sales, human resources and
accounting. It must be expressed in dollars, units and hours in
order to be utilized by everyone involved and it must be "Doable."
It is produced monthly by product family, although it could be code
Master Production Scheduling
A weekly schedule of products to be manufactured by each specific
shop or load center. The MPS is the master of all schedules and
drives all subsequent planning functions. Basically, it tells the
shop what to make, how many to make, when to make them and where
they are to be made. It is code specific and always goes down to the
individual option/feature level.
To be Continued
For balance of this article, click on the below link:
Lean Manufacturing Articles and go to Series 02
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