Planning bills are referred to aspseudo
bills, or false and artificial bills. The reason for this is
that these bills cannot be used to actually build the product.
They are used strictly for planning purposes. The key point here
is that even though these bills cannot be used to build the
product directly, the items that have the planning bills attached
can be master scheduled. This approach allows the master
scheduling and material requirements planning systems to assist in
the planning of material in advance of the customer's requirements
The restructuring process begins by alerting
key individuals that there will be one or more bill restructuring
sessions. The functions that should to be represented are
marketing, manufacturing, finance, engineering, materials, and
master scheduling. A meeting room that contains a large table or
several good sized tables (may end up laying out several computer
reports, creating what if scenarios) as well as one that has a
good amount of wall space and white boards (this layout is not
mandatory, but does provide for a good environment during the
restructuring exercise) needs to be scheduled and reserved. Once
this is done, there's some homework to do before we get started.
Prior to the sessions beginning, several pieces
of data should be retrieved or arrangements made to have the data
available during each session. The objective for the bill
restructuring sessions is to take a product family and separate
its major units into unique and common items. In order to do this
each product family that is to be restructured needs to have a
time-phased bill-of-material available. This time-phased bill
consists of the product's major
units shown in a graphic format including the
individual units' lead time. The last item needed is access to
each product family member's indented of multi-level
As the first session begins, the product family
is identified on one of the walls or white boards. Under the
product family identification, space to note the items that are
common as well as the items that are unique is identified. To get
the process started, the session facilitator commences with a
discussion on where the company must meet the customer in order to
be competitive. The key contributor to this discussion certainly
is marketing. Once the accepted marketplace lead time is known,
the discussion turns to how long it takes to produce the product
(cumulative lead time).
When the marketplace and internal lead times
are identified, the attention is turned to the time-phased
bill-of-material for the product family. The best way to do this
is to hang the time-phased bill on the wall or draw it on a white
board. Once the bill is in place, a line is drawn at the
acceptable marketplace lead time. This line shows what items need
to be stocked and what items can be finished after acceptance of
the customer order.
The next step is to evaluate each item that
needs to be in stock prior to receiving the order. This evaluation
consists of determining if the item is common to each member of
the product family or if it is unique to its option. If an item is
determined to be common, the item is put in the common parts list.
If the item is unique to its option, it is put in that option's
list. Once this process is done, the initial planning bill is
The next step in the process is to evaluate each item that has
been determined necessary to stock in advance of receiving the
customer order. The concentration now is on lead time. Can the
lead time of these items be shortened in order to move them to the
right side of the meeting the customer line? If so, the item will
not have to be stocked and can be removed from the planning bill.
The individuals doing the restructuring may find that by removing
as little as a few days from the planning lead time, several items
can be purchased, fabricated, assembled, etc. after receipt of the
customer order. Of course, this is the ideal strategic position
for a company since it does not need to forecast as many items or
carry as much forecasted inventory.
To be Continued
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