Many companies do physically move an item from one manufacturing
area to another without going via the store because of the
inconvenience or due to the physical size of the item. They then try
to conform to the system requirements by sending the paperwork to
the stores. Unfortunately it is very rarely done well and we end up
with jobs completed but not having all the parts issued to it, or we
have negative balances in the store.
Now we have a system that actually reflects reality!
Some companies make several subassemblies in parallel and then
combine them together in a higher level assembly. The standard MRP
logic demands they are produced individually and then booked to
stock on individual works orders. They are then issued out on a pick
list for the assembly operation. Now we have a working solution
which overcomes these problems as well. The individual sub
assemblies are produced on their own works orders but are then
delivered to the assembly area where they are used. By processing
the receipt transaction to the "LSBS," the "LSBS" balance is
increased and either the works order outstanding quantity is
decreased or the order is closed.
The process of physically moving material into stock and then
issuing it out again, and this can occur at more than one level in
the Bill, adds to the lead time. Depending upon how often we give
the picking lists to the stores, perhaps daily or twice weekly, it
can mean a number of days or weeks are added to the cumulative lead
The concept of line side bin stock and backflushing is a practical
solution to this problem.
Putting all of these techniques together we can end up with a work
cell or assembly line receiving material in several ways:
(a) from stores in exact quantities for a specific job,
(b) from stores in bulk,
(c) from another work center, work cell or assembly line when the
item has been produced on a works order,
(d) From goods receiving,
(e) or direct from a certified supplier.
The result of all this is that items can be issued at the start of
the manufacturing process, and the parts only go to a physical store
once the final assembly is completed and it goes into the finished
The benefits from this combined approach are:
(a) greatly reduced lead times,
(b) more responsiveness to customers,
(c) less storage space required,
(d) a more productive stores operation,
(e) reduced WIP,
(f) ability to handle smaller batches,
(g) a system that supports the way manufacturing operates.
Overall it reduces your costs, increases your customer service and
results in greater profitability.
What stops a company from utilizing these existing features of
their system and introducing these simple but very effective
Typically it is because they are comfortable and do not like changes
in the way they operate.
Perhaps it is time they made the effort to change, to improve their
operation, even though it means they have to work at it for a time,
and make a few decisions.
Will it really hurt that much?
It may mean they stay in business!