Manufacturing Requirements Planning 




Routings typically have more detail in them than is re­quired because companies simply transfer to the routing the steps to make the product the manufacturing engineers have identified. The routing structure needs to be reengineered by first understanding what they are used for. Not only can they identify how to make the product, but they are used for priority planning (dispatch list), capacity planning, and costing the product. We need to ask the question can we combine operations and still accomplish the objectives? An excellent way to eliminate steps is through the use of kanbans. This will identify what to work on and when, without having a routing step. However, the cost and capacity considerations need to be examined first. These are often resolved using activity based costing and by planning the capacity of the constraint machine.

One of the major stumbling blocks to condensing the routing is measuring performance. But before we discuss that issue, let's consider routing accuracy. The minimum acceptable to support the above requirements is 95%. How do we achieve that level? Same as we did with the bill of material, by enlisting the shop people. Start beating them up for performance and they will not feed back the routing data accurately, especially the standard times. Rather than using MRP to report performance why don't we use it to identify problems? Again we have to change management attitude from one of brow beating to one of problem solving.

Cycle Counting

MRP's need for accurate inventory is a well known fact. Cycle countinghas also become recognized as a necessity to achieve and maintain inventory accuracy. Unfortunately, many have employed cycle counting without understanding its purpose. The result is a much lower level of inventory accuracy than the 95% minimum required for MRP when measured on a hit or miss by piece count method. Those that have been successful in achieving the minimum level of inventory accuracy have learned that the purpose of doing cycle counts is to find the cause of errors and not just to correct the inaccurate count because cycle counting can not find and fix the counts as fast as the errors can be made. Since MRP's objective is to eliminate shortages, all parts (Class A, B and C) must be counted, not just the expensive. Most companies are under constraints when it comes to allocating dollars for activities such as cycle counting. Therefore, we want to do as many counts as frequently as possible with the least number of people. This requires reengineering the process. One method to do this is to start down the aisle and count only what is easy. If there is a large quantity that is not easy to count an estimate is done. If the estimate doesn't look accurate the parts are counted and a miss is recorded. If the estimate looks right it is recorded as an audit not an actual count. Process cycle counting has been proven to allow an average of thirty times more counts than the normal ABC analysis while resulting in accuracy well above 98%.

Companies that have employed process cycle counting come to the conclusion quickly that packaging makes the parts much easier to count. A quantity of a thousand might only be ten packages of a hundred. Ten is easy to count, therefore, it can be quickly and accurately counted. This is true not only in cycle counting, but also in receiving and issuing. Packaging should start at the supplier or in the manufacturing areas.

To be Continued


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