In concept, Company C's product flows a lot
like Company B's. The product is a large assembly made up of
subassemblies and other component parts. The product moves from
one assembly position to another. But, unlike Company B's product,
Company C's is not always defined as to its final configuration
until it is almost ready to go into work. If Company C waited
until the final configuration was known before introducing the
order into the system, the lead times for the materials would be
compromised, if not totally consumed. To understand Company C's
options, we must first understand the products.
The products that the company produces fall
into three major families; overseas containers, trailers and
stationary containers. The basic elements of each family of
products is the same despite what the end configuration may be.
For example, every overseas container has a family of basic
components that make up a large portion of its cost.
Coincidentally, the components have long lead times. One of those
components is required at the front end of the process; work
cannot begin without it. The same logic applies to the other
Company C has a couple of problems:
1. The late definition of the final product (engineered to
2. The long lead times of the key components. Again, MPS and
BOM techniques can be used to address the issues.
Scheduling Company C
Even though the end products are
engineered-to-order, at some point in their process they are
basically the same. By identifying the "sameness" we are
able to capture those items in a planning bill of material that is
assigned a phantom part number. The Master Scheduler then has to
calculate how long the order horizon must be in order to provide
comfortable visibility of long lead items. With the input from
Sales and Marketing, the number of products to be taken over the
order horizon are estimated. It is important to note that Sales
and Marketing did not have to predict which specific end
configurations would be taken, only the gross number of units by
family. At this time the Master Scheduler introduced planning
orders into the system for the forecasted products. MRP, then,
produced requirements for the common and long lead time items via
the planning bills of material.
With this approach the common and long lead
items are routinely ordered without disruption. As the end
configuration becomes clear there is plenty of planning resource
available to process the requirements for the peculiar items.
In each of the cases master scheduling and bill
of material techniques were employed to provide not only control
of existing situations, but to create new situations that offer
cost reduction potentials. It is important to note that even
though formal, computer-based systems make these jobs easier, they
are not mandatory. The concepts apply manually just as well as in
an automated environment. Master scheduling and bills of material
should not be viewed as some burdensome activity that has to be
done to support MRP. They should be looked upon as opportunities
to improve the operation. The MPS and BOM are two "no
cost" tools that must be exploited if a company is to
maximize its operating efficiency and reduce cycle times.
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