Lean Manufacturing Planning

The scenario described not only could discourage companies from using material requirements planning, but it could also lead them to the conclusion that material requirements planning, master scheduling, and manufacturing resource planning systems do not work in these complex environments. This may not be true. What if we could figure out a way to master schedule one level lower than the configured end item? Would this give us any advantages? Going back to the scenario, how many bills-of-material would be needed? Would you believe only 54 before the fifth G option is offered? Once the new G option is added, it's 55. Fifty-five sure sounds a lot better than 600,000.

As stated earlier, the next step is to get the demand. So, off to marketing the master scheduler goes. Listen to the new questions in regards to forecasting demand. "Marketing, could you tell us how many product X's we plan to see in the month of January regardless of the configuration? In February? In March? Second question, "marketing, when we sell product X. what is the probability it goes out the door with the Al option? A2 option? Bl option?" These probabilities are for the individual options and need not in most cases take configuration into account, at least not at the MPS level. This is the approach we plan to take in order to use MRPII, MPS and MRP in the make-to-, assemble-to-, and finish-to-order environments. Now let's discuss strategies.

Before a company can do the job of master scheduling, they must go thru a process to determine "what" is to be master scheduled. This function of deciding on master schedule items is impacted by several elements. We have already discussed why customers purchase products—performance to delivery dates, price charged, quality and reliability of the goods, features of the product, and after sale customer service. Besides these elements, there are additional factors that come into play.

Products that manufacturers produce come in many different flavors. A company can produce a few products made from many components or raw materials. A company can produce many different products made from relatively few components or raw materials. A company may find itself producing many different configurations of the product that are made from many compo­nents (these components many times can be built and stocked at some intermediate or modular level) and raw materials. What this says is that the company's product structures influence where the subject company meets the customer.

Another key element in choosing where to meet the customer is the company's cumulative and competition's lead times. Let's say it takes six months to build the product being discussed. If the customer accepts this quoted delivery time, this may be okay. However, if the customer requires a two month delivery time instead of six and competition is willing to satisfy these require­ments, the company being discussed is going to have to deliver the product in the two months lead time or figure out how to beat competition in one of the other areas—price, quality, technology, or service. If the company being addressed loses to competition in all areas, they will probably be out of business shortly.

The various manufacturing strategies used by manufacturing companies to service the marketplace are make-to-stock, finish-to-order, assemble-to-order, buy-to-order, make-to-order, and engineer-to-order. Unless the customer is met with a completed product (make-to-stock) or the customer is met without a product even being designed until the order is received (engineer-to-order), the company probably will adopt some form of the make-to-order strategy coupled with an effort to reduce internal lead times. Adopting this strategy requires some inventory to be carried as well as having finishing capacity available to complete the required product configuration once it is known and defined by the customer.

To be Continued

Lean Six Sigma Training   Thinking Out of the Box   
Balanced Scorecards  Strategic Tactical Planning  
Supply Chain Inventory Management  Total Quality Management Principles
Lean Manufacturing Implementation  Lean Manufacturing Principles