Comparing MRP Against Its 3C Challenger
Even though no significant proof of the cost/benefits of MRP were
ever offered when we embraced it in the 70's, the new alternative's
claimed advantages are rigorously challenged by MRP practitioners
and often disqualified as looking good "in theory" but doubtful as
to working well "in practice."
In view of these circumstances, it became necessary to find a way to
provide reasonable proof and understanding of the significant
positive impact that 3C could have for businesses.
Having as a primary objective the achievement of excellence for a
real factory, the authors launched several 3C-based Logistics pilots
during 1991 and 1992. To date we count 3 years of successful
operations of a factory supported solely and completely by 3C.
A secondary objective of the authors has been to demostrate and
provide proof of the power of 3C for any other business
environments. GAGE has been used to perform rigorous scientific
studies based on simulation modelling.
GAGE is a MM generic simulation model that was created with the
purpose of obtaining the capability of experimenting with
variations of MM rules while measuring the GLOBAL impact that these
variations might have on the system performance metrics.
GAGE calculates the values of the most relevant business performance
metrics, varying only the way the MM function of the business is
executed, and keeping "everything-else equal."
As business transactions occur through time, GAGE, in parallel,
simulates the appropriate events as defined under two radically
different methods: the MRP (Material Requirements Planning) method
and the newer 3C (Capacity, Commonality and Consumption)
GAGE was also designated to specifically search through the entire
Bill of Material (BOM) structure of the business looking for any
presence of Commonality and report a quantitative evaluation of the
Variations between the sales and manufacturing plan and the actual
customer orders received and actual production mix achieved, are
considered the major evil and main cause of poor performance.
Consequently, GAGE allows MM simulations submitted to various
degrees of stochasticity.
Once the simulation time has been reached, GAGE prepares various
summary and (optionally) detailed reports that show the values of
the business performance metrics attained through the application of
the different action rules of the two different MM approaches.
A number of MRP simulators have appeared in the market recently.
These tools allow the user to run "what-if" scenarios aimed at
improving "delivery performance" by allowing a certain level of
"over-planning." An important purpose of these simulators has also
been to provide the capability of measuring the potential negative
impact that inventory reductions could have on "customer service."
The idea is to have a way of knowing and understanding the
"trade-offs" associated with the different MM alternative decisions.
As far as we know, however, all these packages only emulate and
simulate MRP-based systems. This brings the MM professionals back to
what we had been doing for the last 10 years, that is, trying to
improve the business performance constrained by a method whose basic
principles are no longer appropriate.
GAGE today is the only "what-if" MM tool that simulates both an
orthodox MRP and 3C (an MRP-alternative). This characteristics
provides valuable benchmark information that can truly provide
insight into activities that have the potential of generating real
"quantum leap" business performance improvements. GAGE is also the
only tool that measures the COMMONALITY index for the business
products being simulated.
To be Continued
For balance of this article, click on the below link:
Lean Manufacturing Articles and go to Series 01
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