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MRP and JIT
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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.

Business Planning

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 dollars.
Sales Planning

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.

Distribution Planning

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 finished goods.

Production Planning

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 specific.

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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