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Inventory, Purchasing, Reservation, and Restriction Tracking

The firm planned work order lists the component part requirements. The planner can wait for the computer system to allocate material to the work order (overnight), or can elect to make reservations for parts from specific stock locations. Some component parts may have re­strictions on them and cannot be used in all conditions, e.g., shelf life limited parts cannot be issued if they can­not be consumed prior to their shelf life date.

When a work order is released, the picklist prints out. This is the notice to the stockroom as to what parts and materials have to be assembled into a kit to go the work center. Sometimes we call this "kitting the parts." The actual authorization to issue the parts is not the picklist, but the work order (in the system). Once issued, the component parts are no longer in stock; they are issued to the work order to be installed. When the work order is complete, the finished part number is received into stock. This is a single event. The only way to success­fully close a work order is to bring the part into stock; the only way to bring a part into stock is by closing the work order. One transaction—two actions.

Shop Floor Control and Work in Process

When a work order is released, the shop paper is printed. The work order looks like the routing (and is often re­ferred to as the routing). The task of shop floor control is to get the work order package to the supervisor in time for planning the daily activity of the technicians who will perform the work. SFC also coordinates the movement of all of the necessary parts and materials to the work center so the job can start by the start date. As milestone steps are accomplished, they are reported com­pleted (or closed) by shop floor control. Other terms for shop floor control are production activity control (PAC) and manufacturing execution system (MES).

Inventory and Configuration Management

When the work order is complete, the part can be re­ceived into stock—thus closing the work order. An elec­tronic record is passed to configuration management showing that the parts issued to the work order were installed. This gives a real time comparison of the as-built with the as-designed and/or the as-ordered.

Material Requirements Planning

If the planners and shop floor controllers are busy do­ing all this, what is MRP doing? The MRP run looks at the MPS to find what is to be built and when it is to be available. It looks at the BOM and decides what parts will be needed and when they will be required. It looks into inventory to find what parts are already available. And it looks at existing work orders to determine what is to be received into stock to support the build up. Then it lays out planned orders for the planner to review and firm plan. Tribal knowledge is one element that has not been programmed in, therefore the planner is still re­sponsible for making the final judgment. If the data is 98 percent correct to begin with, the planner should be changing no more than 5 to 10 percent of the work orders before releasing them.

Gross-to-Net Calculation Workshop

The best way to teach people how MRP does gross-to-net calculations is to give an assignment. Do people need to know how to do gross-to-net? Absolutely.

Using the data from the bill of mate­rial for the widget assembly (Figure 1) and the data on the gross-to-net calcula­tion worksheet (Figure 2), determine what work orders should be planned for the next quarter.

In the class, I divide the participants into teams of four or five members to work the problem together. This fosters peer tutoring. After everyone has had time to work with the problem, I work through the problem with the entire class and then hand out the answer sheet (Fig­ure 3) so they can study the problem later.



Finally, the participants took the post-test, then scored both the pre-test and the post-test and compared the differ­ences in scores. We discussed the test questions and the rationale behind the correct answers. I recorded delta scores for the class. The differences in the


scores was documentation that the training was suc­cessful. This was included in my report to management.



As shown by the test results, the participants could iden­tify the data elements required to plan and track pro­duction and inventory. They performed gross-to-net calculations, and participated in group discussion em­ploying MRP terminology correctly.

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 13


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