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PRO:MANEnd-User Documentation [Section MRP] [MRP]

PRO:MAN Group, 1999©

W:\mrp\demo\MRP_MAN.docRevision: 06/28/99 2:45 PM

MRP II

[Section Objectives]

We will cover in detail how using the MRP module of the PRO:MAN, a fully integratedsystem tool will impact your operation.

CONTENTS PAGE

§ Definition of MRP II§ Important topics to consider in your MRP strategy§ How to setup and maintain a Master Control Items

MCF.MAINT§ How to enter and maintain a shop calendar of working days

SHOP.CALENDAR CAL.MAINT§ How to enter and maintain lead times for parts

PARTS.MFG PARTS.ENG§ How to enter and maintain planning policies for parts

PARTS.MFG§ How to run MRP and associated reports§ Example of manufactured top level parts with sales orders and work orders

SALES WORK.ORDERSACTIVITY ATPMATL.ANALYSISWO.TO.START MFG.TICKLER

§ Why use Pro:Man master schedulingMS.MAINTACTIVITY ATPMATL.ANALYSISWO.TO.START MFG.TICKLER

§ Why use Pro:Man sales forecastingSF.MAINT SF.HIST.MAINTSF.EXT SF.ACT.EXTACTIVITY MS.ACTIVTY ATPMATL.ANALYSISWO.TO.START MFG.TICKLER




CONTENTS PAGE

§ Analyzing intermediate partsPARTS.MFG (MOA flag) SLB MLB

§ Analyzing purchased partsUsing planned purchase orders and PO.TO.STARTNot using planned orders and TICKLER

§ Analysis of your MRP implementationSchedule attainmentStock shortagesExcess material




[MRP II]Section 1

Manufacturing resource planning (MRPII) as defined by the American Production andInventory Control Society:

A method for effective planning of all resources of a manufacturing company. Ideallyaddresses operational planning in units, financial planning in dollars, and has a simulationcapacity to answer “what if” questions. It is made up of a variety of functions, each linkedtogether: business planning, sales and operations planning, production planning, masterproduction scheduling, material requirements planning, capacity requirements planning, theexecution support systems for capacity and material. Output from these systems isintegrated with financial reports such as the business plan, purchase commitment report,shipping budget, and inventory projections is dollars. Manufacturing resource planning is adirect outgrowth and extension of closed-loop MRP (Material requirements planning).

Section IIAccuracy in bills of material

As will be seen below, once a requirement for a part has been discovered, MRP will add aplan for that part. However, accurate bills of material are required to ensure that the partcan actually be built. No finished part can be built without material.

Accuracy of quantities on handAs will be shown below, all of the MRP calculations are based on maintaining zeroinventory for each planning period. MRP starts with the quantity on hand and applies all ofthe anticipated activity to part, day by day. If the starting balance is wrong, the rest of theMRP process can be pretty much meaningless.

Accuracy of schedule dates on sales orders, work orders, purchase ordersMRP works through each planning period balancing projected inventory against activity.All the planning in the world for a part can be meaningless, if the activity that is beingapplied against the inventory balance is wrong.

Algorithm for MRP calculations1. Determine from the MCF how many days are in a planning period (1 in your case, we

want MRP to tell us how many to build every day, not how many to build in a week).We also determine the first available date that MRP is allowed to put a plan. This isdefined as the number of days before the current date that MRP can put a plan. This isinput in MCF.MAINT, “backoff days”, again shown below. MRP also prompts the userto “replan” parts or leave existing plans if they are sufficient quantity.

2. MRP starts at the top level of parts and works down through levels of bills of material.Each part contains a “low level code”. This determines the lowest point that it exist inbill of material. Each level is planned independently, starting at the top (parts sold onsales orders and forecasted) and working down to the lowest level (purchased parts).

3. Determine the quantity on hand. If there are multi-locations for a part, add the netableparts, skipping the parts in the locations that have the “non-net” flag set.




4. Taking the available quantity on hand, subtract any safety stock. The safety stock is seton the PARTS.MFG (shown below).

5. MRP goes through the list of open work orders and determines the last scheduledcompletion date. MRP then goes through the list of open plans, checks for the “plancode” set to a “1”. This means that the plan is a “firm” plan and MRP does not touchthese plans. The latest of these two dates, the last work order completion date, or thelast completion date on a firm planned order sets the “firm time fence”. MRP does notput plans on or before the firm time fence.

6. MRP goes through the list of master schedules for each part. If the master schedule dateis before the “firm time fence”. It is skipped over and the next date and quantity isreviewed. If the master schedule date is after the “firm” time fence, a plan is added forthe exact quantity on the same date. Each master schedule date is reviewed and theplans added accordingly.

7. MRP keeps track of the last master schedule date. No plans are added before the lastmaster schedule date, except for the ones done in step 5. No shortages nor otherrequirements are considered in this time period. All sales forecast are ignored if beforethe last master schedule date.

8. If sales forecast is used, all dates and quantities are reviewed. If the forecast is beforethe master schedule date, MRP ignores the forecast quantity. If the forecast is after thelast master schedule date, MRP nets the forecast against the existing sales orders.Existing sales orders are said to consume the forecast, in other words, the requirementson inventory is defined as a net forecast amount. The net amount is defined as theforecast quantity less the total required quantity for sales orders between forecastamounts.

9. MRP now makes a list of all the requirements from inventory (net forecast, salesorders, requirements for main assemblies (either on work orders or plans)) and a list ofanticipated receipts into inventory (work orders, plans, and purchase orders). At thispoint, master schedule no longer affects any calculations. It is not considered arequirement on inventory. MRP has put plans into the system exactly per your masterschedule, without any regard to projected inventory balances.

10. MRP now starts with the starting quantity on hand (on hand, nettable, less any safetystock) and looks at the each planning period (a day in your environment). It takes thisstarting quantity, subtracts the requirements out of inventory, add any expected receiptsinto inventory, and calculates an anticipated quantity at the end of the planning period(a day).

11. If the projected quantity on hand is zero or more, the system takes this projected onhand balance, and proceeds to the next planning period.

12. If the quantity is less than zero, MRP must now determine if the planning period isbefore the “firm” time fence and/or the “master schedule” time fence. If it is beforeeither of these dates, no plans are added and the projected quantity on hand is used asthe starting balance for the next period. If the period is after the time fence, MRP canadd a plan. If a plan already exists, it’s quantity is reviewed to determine if the quantityis sufficient to bring the projected quantity on hand back to zero. If so, MRP could usethis plan, unless the user has told MRP to replan the parts. In this case, the existing planis deleted and the following logic takes over. Changes in bills of material and order




policies are the primary reasons why you should “replan” every thing as a normalpractice. MRP looks at the part to determine if an order policy exist for the part. This isfound on PARTS.MFG and is detailed below. If no policy exist ( a good idea whenstarting out), then a plan is made for the exact quantity needed to bring the projectedquantity back to zero. If a planning policy exists, a plan quantity is calculated based onthe quantity required to bring the projected quantity on hand back to zero, as modifiedby the parameters set for the order policy.

13. If a plan was entered, the bill of material for that part is reviewed. The system looksdown one level in the bill of material and makes a list of the components and acorresponding quantity required to build the plan quantity of the parent part. Thequantity per assembly and scrap are used to calculate the required quantities for eachcomponent. If the component part has it’s MOA flag set (on PARTS.MFG), the part isnot added to the list of required components, but all of the components for the MOApart are added to the list of components.

14. Once the list of components and associated quantities are determined, the systemdetermines a start date for the plan. This will be calculated by the system in one of twoways. The first is to take the manufacturing lead time (or purchase lead time ifpurchased part), subtract this number of calendar days from the planning period beingworked on and use this as a starting date. If this starting date falls on a non workingday, the start date is backed up to the previous work day. The alternative to using leadtimes, is to use the dynamic load lead time. This is controlled by an MCF item shownbelow called MRP150.PER parameters. IF this feature is turned on, the number ofhours for one part are calculated by a ROUTING.ROLLUP and put on thePARTS.ACCT screen. These hours are used in conjunction with the parent partquantity to determine the total number of hours required to build these parts. An otherMCF item called STD.HRS is used to roughly determine the capacity per day. The totalnumber of hours divided by the capacity determines the number of days to build theproduct. Once the lead time has been determined, and subtracted from the completiondate, and adjusted back to the last working day, a requirement for each component islogged into the system based on the quantity required for that component and the startdate of the plan. All of these requirements show up on the activity screen. Theserequirements are simply logged at this point and the requirements themselves will beinvestigated when MRP gets down to the next level and it will plan that component partaccording to it’s own list of inventory activity.

15. MRP proceeds to the next level of parts and works through them. The process continuesuntil the lowest level of parts has been planned.

Section III

We must start with how the default values in our master control file are set and will affect the MRPprocess. MCF items involved with the process:




MCF ITEMS DESCRIPTIONECO.FLAG (CN) FLAG FOR PROMPTING FOR EFFECTIVITY DATE

IN BILLSLOC.CTRL (CN) FLAG TO TURN ON PROMPTING FOR LOCATION

NUMBERSPO.PLAN.FLAG FLAG FOR MRP TO CREATE PLANNED PURCHASE

ORDERSSF.DEL.FLAG FLAG FOR MRP TO DELETE OLD SALES

FORECASTSMS.DEL.FLAG FLAG FOR MRP TO DELETE OLD MASTER

SCHEDULESMOA.PLAN.FLAG CREATE PLANNED ORDERS FOR MOA PARTS

MRP150.FLAG MRP PERIOD PARAMETERS

STD.HRS COMPANY STANDARD MAN/SHIFT,MACHINE/SHIFT, SHIFTS/DAY.

PO.DAYS COMPANY STANDARD SLIDE & ACCELERATEDAYS

MFG.DAYS MANUFACTURED PART SLIDE & ACCELERATEDAYS

These examples show how your system is set currently, and some reasoning is added below:

PORT 3,ACCOUNT proman_mm MCF.MAINT 18:33 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------24 ECO.FLAG FLAG FOR PROMPTING FOR EFFECTIVITY DATE IN BILLS 1. ENTER A 1 TO PROMPT FOR EFFECTIVITY DATE OR 0 TO NOT PROMPT 1. 0

Enter field to change 'n.n','D'-Desc,'DEL','END','TOP':

This flag tells the system that you want to have different bills of material at different times for thesame parent part. If this is used, you will be able to tell the system that up to a certain date, the billof material should have certain components and quantities. After a certain date and before anotherdate, the parent part can have another set of components and quantities. There can be as manydates and combinations as you like. MRP and work order process look at the start date of the planand/or work order to determine what components and associated quantities to plan for.




PORT 3,ACCOUNT proman_mm MCF.MAINT 18:33 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------30 LOC.CTRL.FLAG FLAG TO TURN ON PROMPTING FOR LOCATION NUMBERS 1. ENTER A 1 TO PROMPT FOR LOCATION NUMBERS OR 0 TO NOT PROMPT 1. 1


This flag tells the system that you want to use more than one location for parts. This may not haveany affect on MRP unless you flag some of those locations as “non-nettable”. This is done oneither the PARTS.STORE screen, when you ran “CONVERT.TO.LOC”, or PARTS.ACCT.LOC. Ifyou do not set any locations as “non-net” then this will have no impact on MRP. An example ofthis might be when product is sent to trade shows. It is not available to ship to customers when it isat the show. Some people also have show rooms with inventory in them. Some parts are ininspection and may not be available for shipment to a customer.

PORT 10,ACCOUNT jess5.0 MCF.MAINT 13:01 MONDAY 06/28/99PRO:MAN REL 5.0, LICENSE # 777 AUTOMATED COMPUTER SOLUTIONS-------------------------------------------------------------------------------45 po.plan.flag FLAG FOR MRP TO CREATE PLANNED PURCHASE ORDERS 1. ENTER A 1 TO CREATE PLANNED PURCHASE ORDERS OR 0 TO DISABLE 1. 1 2. ENTER A 1 TO DISABLE SETTING PURCHASE ORDER FENCE OR 0 TO ENABLE 1. 0


This flag tells MRP to put planned (or suggested) purchase orders in the system If this flag is set tozero, MRP will not put any plans in the system. PO.TO.START can not be used in this environment(since this fastkey lists plans with a start date within a planning horizon). If the flag is not set, youmust use your TICKLER report choosing the “shortage” option. Any shortage of inventory will be




listed on the report. However, the TICKLER does not have ability to apply an order policies. Theshortage quantity will be the quantity required on that date. Generally, it is a good idea to havethis flag turned on.

PORT 3,ACCOUNT proman_mm MCF.MAINT 18:33 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------56 SF.DEL.FLAG FLAG FOR MRP TO DELETE OLD SALES FORECASTS 1. ENTER A 1 TO DELETE OLD SALES FORECASTS OR 0 TO NOT DELETE 1. 1


This flag tells MRP to automatically delete any sales forecast from the activity of the part if theforecast due date is before the date that MRP is run. Basically, we do not want MRP consideringany forecast that is due before the day that MRP is running. IT would not have any meaning. If theflag is set, MRP automatically deletes the forecasted quantities and date. NOTE: this is not to saythat forecasts from a week or two in the future are of use either. Forecast should be used toapproximate customer requirements. If your quoted lead times make delivery of product before aforecast impossible, you may want to manually delete the forecast. It is generally a good idea tohave this flag set




PORT 3,ACCOUNT proman_mm MCF.MAINT 18:33 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------42 MS.DEL.FLAG FLAG FOR MRP TO DELETE OLD MASTER SCHEDULES 1. ENTER A 1 TO DELETE OLD MASTER SCHEDULES OR 0 TO NOT DELETE 1. 1


This tells MRP to automatically delete master schedule dates and quantities, if the date if beforethe date MRP is running. Again, master schedules before today are meaningless, and hence shouldbe deleted. MRP can do this automatically. It is generally a good idea to have this flag set.

PORT 3,ACCOUNT proman_mm MCF.MAINT 18:33 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------38 MOA.PLAN.FLAG CREATE PLANNED ORDERS FOR MOA PARTS 1. '1' - Create planned orders for MOA parts or '0' - don't create 1. 0


Do NOT use this flag! It tells MRP to skip any flags set on parts and make plans for all parts. Thisis sometimes a good idea (usually on one part, not all parts), it is incredibly hard to get rid of allthe plans in MRP if you set the flag back to not plan. Basically MRP blows through the MOA partand does not do any planning what so ever. Hence, if a plan exist for a MOA, it is basicallyignored in MRP runs, and will never get replanned nor deleted. This can make subsequent workorders have incorrect components that were not correctly planned.




PORT 3,ACCOUNT proman_mm MCF.MAINT 18:33 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------41 MRP150.PER MRP PERIOD PARAMETERS 1. # OF DAYS IN EACH PERIOD 1. 1 2. DAY OF THE WEEK THE PLAN STARTS 1. MON 3. NUMBER OF PERIODS 1. 300 4. BACKOFF DAYS FROM MRP RUN DATE FOR FIRST PERIOD 1. 1 5. SET TO A 1 TO USE ROUTING HOURS FOR CALCULATING PLAN START DATE 1. 0 6. SET TO A 1 TO USE NORMAL DEMAND AFTER LAST MASTER SCHEDULE 1. 1


PORT 3,ACCOUNT proman_mm MCF.MAINT 18:33 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------64 STD.HRS COMPANY STANDARD MAN/SHIFT, MACHINE/SHIFT, SHIFTS/DAY. 1. ENTER THE STD MAN SHIFT IN WHOLE HOURS 1. 8 2. ENTER THE STD MACHINE SHIFT IN WHOLE HOURS 1. 8 3. ENTER THE STD SHIFTS PER DAY 1. 1





PORT 3,ACCOUNT proman_mm MCF.MAINT 18:33 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------44 PO.DAYS COMPANY STANDARD SLIDE & ACCELERATE DAYS 1. ENTER THE SLIDE DAYS IN WHOLE DAYS 1. 30 2. ENTER THE ACCELERATE DAYS IN WHOLE DAYS 1. 5 3. THE # OF DAYS A RECPT CAN BE EARLY OR LATE & STILL BE CONSIDERED ON TIME 1. 30


PORT 3,ACCOUNT proman_mm MCF.MAINT 18:33 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------36 MFG.DAYS MANUFACTURED PART SLIDE & ACCELERATE DAYS 1. ENTER THE SLIDE DAYS IN WHOLE DAYS 1. 5 2. ENTER THE ACCELERATE DAYS IN WHOLE DAYS 1. 0


Section IV

SHOP.CALENDAR and CAL.MAINT

An example of how to create (or mass update) a shop calendar is shown below usingSHOP.CALENDAR.




GENERATE, PRINT, DELETE, OR MODIFY THE CALENDAR (G/P/D/M) :G

Once you press “G” for generate, you will be prompted:

FIRST DATE :6/23/99

This is the first planning date that set in your calendar. It is a good idea to set it a week or so beforethe first planning period in MRP. You will almost certainly have plans in the first planning period.MRP is going to want to subtract the lead time for the part in the plan to determine the startingdate. This starting date must exist in your shop calendar or you will get an error. Set this first dateas the first planning period minus the maximum lead time possible in your system.

To maintain individual dates as working and/or not working, use CAL.MAINT. An example isshown below.

|-------------------------------------------------------|| June 1999 ||--Sun-----Mon-----Tue-----Wed-----Thu-----Fri-----Sat--| Cal.maint| | | 1 | 2 | 3 | 4 | 5 | Maintain shop Calenar| | | | | | | NW ||-------------------------------------------------------| Starting 01/01/99| 6 | 7 | 8 | 9 | 10 | 11 | 12 | Ending 03/10/02| NW | | | | | | NW ||-------------------------------------------------------|| 13 | 14 | 15 | 16 | 17 | 18 | 19 || NW | | | | | | NW ||-------------------------------------------------------|| 20 | 21 | 22 | 23 | 24 | 25 | 26 | Enter option| NW | | | | | | NW | L ast Mn|-------------------------------------------------------| N ext Mn| 27 | 28 | 29 | 30 | | | | P rint| NW | | | | | | | C hange|-------------------------------------------------------| E xit| | | | | | | | >> :| | | | | | | ||-------------------------------------------------------|

Note the “NW” high lighted in yellow. These are flagged a “non working days” and MRP willnot put a starting nor finish date for a plan on these dates. To toggle a day from working to non-working or non-working to working, Press “C” for change. The system will ask which day you arewant to change. It will respond by redisplaying the day with the correct nomenclature under thedate. The starting and ending date of your shop calendar are shown on the upper right side. Thestaring date was set from your SHOP.CALENDAR entry for first date. The ending date was set byyour MCF item MRP150.PER, number of planning periods.

Section V Definition of lead times in days. Lead times, either for manufactured or purchased, are enteredeither on PARTS.MFG or PARTS.ENG. A part must have a lead time to be planned by MRP. Thelead time must be entered for new parts on PARTS.ENG.




Lead time is defined as the total number of working days from being notified of the need for thepart to having the part in inventory. This total number of days should include time to generate anddistribute work orders/purchase orders, time to manufacture or purchase the part, and time to movethe part into inventory.

The lead time will be used for two different purchases in the system. The first is to generate thestart date for work order, purchase orders, and plans. These start dates will be used to generateyour WO.TO.START and PO.TO.START. These reports should be selected and worked on basedon the start date for the activity. In other words, these are the items that I need to start procuringtoday in order to have them in inventory in time for their required date. The second important itemthat the start date is used for is in planning for material requirements. The components necessaryon any work order will be required (and planned) on the start date of the work order. In otherwords, the date that the components must be in inventory and available for this work order, is thestart date of the work order.

The lead time is the number of working days, not calendar days. The following is and example ofhow the start date is calculated for some plans (the same would be true for work orders). Our parthas a lead time of 5 “working” days (as entered on PARTS.ENG). Our calendar (fromCAL.MAINT) looks like this:

|-------------------------------------------------------|| June 1999 ||--Sun-----Mon-----Tue-----Wed-----Thu-----Fri-----Sat--| Cal.maint| | | 1 | 2 | 3 | 4 | 5 | Maintain shop Calendar| | | | | | | NW ||-------------------------------------------------------| Starting 12/30/95| 6 | 7 | 8 | 9 | 10 | 11 | 12 | Ending 03/10/02| NW | | | | | | NW ||-------------------------------------------------------|| 13 | 14 | 15 | 16 | 17 | 18 | 19 || NW | | | | | | NW ||-------------------------------------------------------|| 20 | 21 | 22 | 23 | 24 | 25 | 26 | Enter option| NW | | | | | | NW | L ast Mn|-------------------------------------------------------| N ext Mn| 27 | 28 | 29 | 30 | | | | P rint| NW | | | | | | | C hange|-------------------------------------------------------| E xit| | | | | | | | >> :| | | | | | | ||-------------------------------------------------------|

Case Due Day 1 Day 2 Day 3 Day 4 Day 51 6/28 6/25 6/24 6/23 6/22 6/212 6/29 6/28 6/25 6/24 6/23 6/223 6/30 6/29 6/28 6/25 6/24 6/234 7/1 6/30 6/29 6/28 6/25 6/245 7/2 7/1 6/30 6/29 6/28 6/25




Day 5 would be used as the start date in each of the examples above. The due date of the plan (orwork order) is not assumed to be one of the available work days. The system assumes that the partis available at the beginning of the due date and not at the end of the day.

The start date on any given plan can be seen on either the PLAN screen or the PLO.MAINTscreen. The actual start date on a work order can be maintained when creating the work order tohandle special circumstances. You can not maintain the start of a plan.

There is another option to using lead times in calculating a start date for a manufactured part. Ifyou have routings for your parts, you can have the system use routing hours to calculate a start daterather than using the standard lead time. If you do not have routings that fairly represent the totalmanufacturing cycle (including queue and move times), you should probably not use this method.If you choose to use this method, you must:

1. Use ROUTING.ROLLUP to update the total number of hours necessary to manufacturethe parts. The important data from this process can be found on the bottom of thePARTS.ACCT screen in two fields called “standard run hours this level” and “standardsetup hours this level”. This will be the total number of both run and setup hours.

2. Change the flag in MCF.MAINT, CN types, MRP150.PER, prompt number 5 from a“0” to a “1”

3. Review and update the standard hours in a working day using MCF.MAINT, CN types,STD.HRS item. This item will be used to calculate the available capacity available foreach working day.

4. A total time to manufacture will be calculated by multipling the build quantity by the“standard run hours this level”, plus the “standard setup hours this level”.

5. A lead time will be calculated as the total time to manufacture divided by the capacityper day, rounded off to the next highest whole day.

If, we were to build 25 parts. Each part takes 1.65 run hours and .5 setup hours asshown on the PARTS.ACCT screen.

Total manufacturing time = (25 x 1.65) + .5 hoursCapacity is set at 2 shifts, 8 hours per shiftCapacity per day = 16 hoursLead time = 41.75/16 use 3 days

If you choose to use standard lead times, you will need to enter these on either the PARTS.ENG orPARTS.MFG as shown below.




PORT 10 ACCOUNT JESS5.0 PARTS.MFG TUESDAY 06/22/99 09:55-------------------------------------------------------------------------------

*) Part Number 0537-0102-00010 MM TEST PART 1) Pur/Mfg (P/M) M 2) Pur Lead Time 0 18) AVE RUN SIZE 3) Mfg Lead Time 1 4) Min Stock Qty Lot Ctrl Flag 5) Max Stock Qty Stock U/M EA 6) Safety Stock Purch U/M 7) Reorder Qty U/M Conv Fctr 8) Min Order Qty Weight 9) Mlt Order Qty Class Code10) Max Order Qty Product/Model11) E O Q Bin Item12) Parts Per Setup Used This Yr13) Nbr Days Supply Used Last Yr14) Shrink Percent Drawing Status A15) Order Policy16) Inspection Req17) Made On Assy

Modifications 1-18, TOP-exit wo/update, END-file, \\\\\\\\ ^^-repaint screen, ?-help, REV-Revision

PORT 10 ACCOUNT JESS5.0 PARTS.ENG TUESDAY 06/22/99 09:56-------------------------------------------------------------------------------

*) PART NUMBER 0537-0102-00010 1) Description MM TEST PART 2) Stock U/M EA 3) Pur/Mfg (P/M) M 9) Class Code 4) Pur Lead Time 0 10) Product/Model 5) Mfg Lead Time 1 11) Buyer/Planner 6) Multi Loc Flag 12) Purch U/M 7) Lot Ctrl Flag 13) U/M Conv Fctr 8) Drawing Status A 14) Inv Type

15) Drawing Nbr 16) Dwg Sht 17) Dwg Type 18) Dwg Size 19) Dwg Rev \\\\\\\\\\\\\\\ \\ \\\\\ \\ \\1220) Ven Nbr Vendor name 21) Mfg Name 22) Mfg Part Number \\\\\\ \\\\\\\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\\\\ 1 2





Section VIOrder policies on parts are not used by the system until a shortage has been identified. As MRPanalyzes each part and each planning period (daily or weekly), the projected on hand balance iscalculated by MRP. If these is a shortage, MRP then looks at the part to find any policies that maybe present and will adjust the actual plan build quantity to match this policy. Such policies shouldrepresent how the parts are purchased and/or manufactured. Some examples of reasons to usepolicies:

1. A number of parts must be punched out of whole plate and the CNC software is set upto punch only complete plates.

2. You must purchase whole boxes of parts and 25 parts come in a box3. Jigs on assembly lines must be filled to balance the machine during the process4. A heat treat furnace holds a certain number of parts5. You have economically calculated that it is cost effective to always build a number of

parts.6. You can obtain a chemical wash truck once every two weeks

If order policies are not used, the planners and purchasing agents will apply the above knowledgemanually when the place their purchase orders and/or open their work orders. Order policiesalways have one effect for certain, this is that they increase the actual plan quantity above therequired quantity in a given planning period. Hence, you are always building or buying inventoryahead of time, hopefully, economically. From this point, using discrete order policies (planningone part for one part required) is the safest policy from an inventory point of view. This is notnecessarily the most economical approach and it does rely on your planner/buyer to correct thework order/purchase order.

Example of how an order policy of discrete (one part planned for one part required):


*) Part Number 0537-0102-00010 MM TEST PART 1) Pur/Mfg (P/M) M 2) Pur Lead Time 0 18) AVE RUN SIZE 3) Mfg Lead Time 1 4) Min Stock Qty Lot Ctrl Flag 5) Max Stock Qty Stock U/M EA 6) Safety Stock Purch U/M 7) Reorder Qty U/M Conv Fctr 8) Min Order Qty Weight 9) Mlt Order Qty Class Code10) Max Order Qty Product/Model11) E O Q Bin Item12) Parts Per Setup Used This Yr13) Nbr Days Supply Used Last Yr14) Shrink Percent Drawing Status A15) Order Policy16) Inspection Req17) Made On Assy


Or….





*) Part Number 0537-0102-00010 MM TEST PART 1) Pur/Mfg (P/M) M 2) Pur Lead Time 0 18) AVE RUN SIZE 3) Mfg Lead Time 1 4) Min Stock Qty Lot Ctrl Flag 5) Max Stock Qty Stock U/M EA 6) Safety Stock Purch U/M 7) Reorder Qty U/M Conv Fctr 8) Min Order Qty Weight 9) Mlt Order Qty Class Code10) Max Order Qty Product/Model11) E O Q Bin Item12) Parts Per Setup Used This Yr13) Nbr Days Supply Used Last Yr14) Shrink Percent Drawing Status A15) Order Policy A16) Inspection Req17) Made On Assy


Results of running MRP with the above order policy, assuming zero parts on handMon Tue Wed Thu Fri

Sales Order Qty 5 5 3 3 4MRP plan QTY 5 5 3 3 4

Example of an order policy of MIN/MLT/MAX .


*) Part Number 0537-0102-00010 MM TEST PART 1) Pur/Mfg (P/M) M 2) Pur Lead Time 0 18) AVE RUN SIZE 3) Mfg Lead Time 1 4) Min Stock Qty Lot Ctrl Flag 5) Max Stock Qty Stock U/M EA 6) Safety Stock Purch U/M 7) Reorder Qty U/M Conv Fctr 8) Min Order Qty 10 Weight 9) Mlt Order Qty 10 Class Code10) Max Order Qty 200 Product/Model11) E O Q Bin Item12) Parts Per Setup Used This Yr13) Nbr Days Supply Used Last Yr14) Shrink Percent Drawing Status A15) Order Policy B16) Inspection Req17) Made On Assy





Example of how MRP would create plans for this policy, assuming no quantity on hand.

Mon Tue Wed Thu FriSales Order Qty 15 15 300 25 24MRP plan QTY 20 10 200 130 20

Example of using EOQ (economic order quantity) policy:PORT 10 ACCOUNT JESS5.0 PARTS.MFG TUESDAY 06/22/99 09:57-------------------------------------------------------------------------------

*) Part Number 0537-0102-00010 MM TEST PART 1) Pur/Mfg (P/M) M 2) Pur Lead Time 0 18) AVE RUN SIZE 3) Mfg Lead Time 1 4) Min Stock Qty Lot Ctrl Flag 5) Max Stock Qty Stock U/M EA 6) Safety Stock Purch U/M 7) Reorder Qty U/M Conv Fctr 8) Min Order Qty Weight 9) Mlt Order Qty Class Code10) Max Order Qty Product/Model11) E O Q 25 Bin Item12) Parts Per Setup Used This Yr13) Nbr Days Supply Used Last Yr14) Shrink Percent Drawing Status A15) Order Policy D16) Inspection Req17) Made On Assy


Example of how MRP would create plans for this policy, assuming no quantity on hand.Mon Tue Wed Thu Fri





Example of using a “number of days supply” policy:PORT 10 ACCOUNT JESS5.0 PARTS.MFG TUESDAY 06/22/99 09:57-------------------------------------------------------------------------------

*) Part Number 0537-0102-00010 MM TEST PART 1) Pur/Mfg (P/M) M 2) Pur Lead Time 0 18) AVE RUN SIZE 3) Mfg Lead Time 1 4) Min Stock Qty Lot Ctrl Flag 5) Max Stock Qty Stock U/M EA 6) Safety Stock Purch U/M 7) Reorder Qty U/M Conv Fctr 8) Min Order Qty Weight 9) Mlt Order Qty Class Code10) Max Order Qty Product/Model11) E O Q Bin Item12) Parts Per Setup Used This Yr13) Nbr Days Supply 5 Used Last Yr14) Shrink Percent Drawing Status A15) Order Policy L16) Inspection Req17) Made On Assy


Example of how MRP would create plans for this policy, assuming no quantity on hand.Mon Tue Wed Thu Fri


Section VII

Why use LOAD.RAIn normal MRP processing, the system constantly monitors inventory activity and flags apart as requiring processing by MRP. This means that MRP should run faster because itonly has to plan parts that have had activity changes from the last time MRP was run.

There are a couple of issues in this logic. If you have changed your order policies, yourlead times, perhaps your routings (and are using routing times rather than lead times),planning flags in bills of material, ‘use absolute quantity” in a bill of material, or structureof you bills of material, MRP will not necessarily now all the parts affected by thesechanges.

A safe approach is to tell MRP to re-plan all parts that have any activity at all, whetherchanged since the last MRP run or not. This will force MRP to look at all parts that haveany activity what so ever (any thing that shows up on MS.ACTIVITY). The result will bethat MRP will take a little longer, but you will know that any of the changes mentionedabove have not slipped through the planning process. If you do not make a lot of changes inthese items, you do not need to tell MRP to take this step.




The fastkey you will use to tell MRP to re-plan all parts is called “LOAD.RA”. It will lookat each part and flag it for re-planning if it has any activity. This process takes less than aminute on most machines.




Example of MRP.RUN screen:

PORT 3,ACCOUNT proman_mm MRP.RUN 20:07 WEDNESDAY 06/23/99PRO:MAN REL 5.0, LICENSE # 5147 MICRO METL CORP-------------------------------------------------------------------------------

MATERIAL REQUIREMENTS PROCESSING, ENTER 'B' TO BYPASS =

Would you like to replan all items that have had activity or only those with date and quantity changes?

Enter "ALL" or <CR> to replan everything

Enter "NO" for date and quantity changes only

Enter a "B" to bypass =ALL

You should always run “ALL” option. This will pick up any bill of material changes as well asany other MRP parameter changes on parts (ie. Safety stock and order policies).

Section VIIIThis section will present case studies of activity for parts and how MRP reacted to the situationand added plans (or suggested action).

In the first test case we will look at this set of conditions:

Case IA A sales order has been entered with two delivery dates. There is no quantity on hand and MRPhas not been run. The activity for a part can be seen in several places, namelyMATL.ANALYSIS.IND, ACTIVITY, ATP, SHOW.MRP.DET, or MPS.DAILY. All of theseshow the same information in different formats. This case looks like:




ATP AVAILABLE TO PROMISE FOR PART 07:21:09 24 Jun 1999 PAGE 1

PART NBR: 0537-0102-00010 DESC: MM TEST PART LT CODE: M SAFETY STK: ON HAND: NON NET QTY: 0 REC/INSP: PREV BALANCE: 0

PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH

CUST ORD 22 15OTH REQ

OPEN ORDPLAN ORD

PROJ INV 0 0 0 0 0 -22 -22 -37 -37

AVL PROM -22

F-Fwd,B-Bck: :

In this case, there are no planned orders, so MRP has not run yet.

Case 1BIf we now run MRP, with an order policy set to “a” (or left blank) in PARTS.MFG.






PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH


OPEN ORDPLAN ORD 22 15

PROJ INV 0 0 0 0 0 0 0 0 0

AVL PROM

F-Fwd,B-Bck: :

In this case, MRP has put planned orders on 6/28 and 6/30 since there is no quantity onhand to cover the sales orders.

Case 1CIf we had a quantity on hand, say 15 parts, the results would have looked like:


PART NBR: 0537-0102-00010 DESC: MM TEST PART LT CODE: M SAFETY STK: ON HAND: 15 NON NET QTY: 0 REC/INSP: PREV BALANCE: 15

PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH



PROJ INV 15 15 15 15 15 0 0 0 0

AVL PROM

F-Fwd,B-Bck: :

In this case, there were 15 parts available at the start of 6/28. The sales order was for 22,leaving a shortage of 7. Hence, MRP inserted a planned order for 7 on this day. The projectedbalance at the end of day will now be zero. This will now be the starting balance for the next day.Since there is no projected balance at the start of 6/30, MRP has planned all 15 parts on due on thesales order.




Case 1D

In this case, we will start with the same sales order requirements as above, we will not havea quantity on hand, but we have added an order policy of “B” (min/max/mult). The PARTS.MFGfor this part would look like:

PORT 10 ACCOUNT jess5.0 PARTS.MFG THURSDAY 06/24/99 07:42-------------------------------------------------------------------------------

*) Part Number 0537-0102-00010 MM TEST PART 1) Pur/Mfg (P/M) M 2) Pur Lead Time 0 18) AVE RUN SIZE 3) Mfg Lead Time 1 4) Min Stock Qty Lot Ctrl Flag 5) Max Stock Qty Stock U/M EA 6) Safety Stock Purch U/M 7) Reorder Qty U/M Conv Fctr 8) Min Order Qty 15 Weight 9) Mlt Order Qty 15 Class Code10) Max Order Qty Product/Model11) E O Q Bin Item12) Parts Per Setup Used This Yr13) Nbr Days Supply Used Last Yr14) Shrink Percent Drawing Status A15) Order Policy B16) Inspection Req17) Made On Assy


The result of MRP would then look like:



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH



PROJ INV 0 0 0 0 0 8 8 8 8

AVL PROM 8

F-Fwd,B-Bck: :




At the start of 6/28, the projected balance in inventory was zero. The customer ordersrequire 22. Normally MRP would plan 22 if the order policy was not in place. However, MRPfound the order policy of “B”. The policy states that we always want to build at least 15 parts andwe want to build them in lots of 15 after that. Order quantities would be 15,30,445,60,…. With noupper limit since we left field 10 blank (on PARTS.MFG). In our case above, MRP determinedthat we need 22 parts on 6/28. With the order policy in place, MRP increases the planned orderquantity from 22 to 30, the first order policy quantity that satisfies the requirements of the day.This leaves a projected inventory balance of 8 at the end of the day that can be used for the nextrequirements. On 6/30, we start the day with a projected balance of 8 parts. We have requirementsfor 15, leaving a shortage of 7 parts. MRP again starts with the shortage of 7 parts and determinesthat the first order policy quantity available to use is 15. Hence a plan is input for a quantity of 15.

These are the general cases of how parts will look after MRP without any work ordersbeing present. Work orders, like plans, put parts into inventory. There is one specific differenceand that deals with how MRP interprets work orders. Work orders are considered a flag to thesystem that you have investigated, planned, and release work to the shop floor. There are manyfactors that go into this process that can not be considered by the computer system and MRP.Hence, a work order signals that the human interface is done and MRP should keep it’s hands off.Therefore, MRP will not insert nor delete any plans on or before a work order. Let’s look at someexamples.

Case 2A

In this case we will have the same sales orders as before. We will start with zero inventory,but you plant scheduler has put a work order in for 6//28. This work order quantity is exactly theamount of the sales order.



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH


OPEN ORD 22PLAN ORD 15

PROJ INV 0 0 0 0 0 0 0 0 0

AVL PROM

F-Fwd,B-Bck: :




In this example we can see the work order quantity is listed on 6/28 to match our work orderquantity. MRP did not replan (as the work order was for sufficient quantity to match therequirements) this period. It did move on to the next requirements and plan them. This looks prettymuch like case 1A above, except that the plan has been converted into a work order. The balanceof the process remains the same.

Case 2B




In this case we will look at a situation where the work order due date is after the sales orderrequirement. This would be the case where the work order can not be completed in time to makethe customer order.



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH



PROJ INV 0 0 0 0 0 -22 0 0 0

AVL PROM -22 22

F-Fwd,B-Bck: :

In this case, we see that we have a projected quantity on hand of –22 on 6/28. We are backto zero the following day because this is now the scheduled completion date on our work orders (asentered on WORK.ORDERS). MRP can not put a plan inside 6/29 due to the work order on thisdate. The first date that MRP can plan in would be 6/30. All of the activity is accumulated andused in determining the projected quantity on hand, MRP simply does not make any suggestions(or planned orders) before your last work order.

Case 2C

In this case, we put the work order due date back to 6/26, but the quantity is not sufficientto cover the sales order quantity. There can be many reasons why this happens. Perhaps the workorder quantity was set based on available raw material or by available labor capacity. Perhaps thesales order was updated to a new quantity after the work order was created. The result should looklike:



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH


OPEN ORD 15PLAN ORD 7 15




PROJ INV 0 0 0 0 0 -7 0 0 0

AVL PROM -7 7

F-Fwd,B-Bck: :

In this case, we have a work order for 15 parts due on 6/28. However, the sales order srequire 22 parts. This leave a shortage of 7 parts as shown. MRP can not plan inside of your firmtime fence (set by the work order on 6/28). So, MRP puts a plan for the shortage in the nextavailable planning period (the next day in this case). This moves the projected inventory back tozero and MRP continues on with the subsequent planning periods. In this case you would havebeen given a message on your MFG.TICKLER report to “accelerate” you plan. This is because theMRP could not put the plan where it was really needed.

PORT 10 ACCOUNT jess5.0 PARTS.ENG THURSDAY 06/24/99 10:13------------------------------------------------------------------------------- *--------------------------------------------------------------------------* *|Page 1 MT 10:13:54 24 Jun 1999 | 1| | 2|CODE WO.NBR.... QTY.... ORIG.DATE RSCHED.DATE ACTION.... | 3| | 4| PL PLAN-2 33 7 06/29/99 06/28/99 ACCELERATE | 5| | 6|[405] 1 items listed out of 1 items. | 7| | 8| | | |15| | | |1 | |2 | |20| |r | | 1F-fwd,B-bck,ESC-exit--------------------------------------------------p1/1c1 2

In the case above, we used the ‘]MTP” macro from the bottom of any screen that containsthe part number. It is exactly the same format as the MFG.TICKLER report. The plan number forthe part is 33 (which was set by MRP automatically), the quantity is 7 parts, it is currentlyscheduled to be completed on 6/29 (the earliest MRP could put it), but it should be rescheduled to6/29 to meet the requirements.

Case 2D

In this case we have issued a work order and anticipated the sales order requirements. Thework order completion date is set to 6/26 and has a quantity of 30 (our guess as to the anticipatedquantity, or the amount we had raw material for).






PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH



PROJ INV 0 0 0 30 30 8 8 0 0

AVL PROM 8 -8

F-Fwd,B-Bck: :

In this case, the work order is schedule to be complete on 6/26. This gives a projectedquantity on hand of 30 on that day. This quantity is available at the start of 6/26 planning period.These sales orders require 22 parts, leaving 8 as the projected quantity. The 8 parts are thenavailable for the requirements on 6/30, but do not cover all the sales orders. MRP then plans forthe shortage of 7 parts.

SECTION IX – why use master schduling

Master scheduling allows the planners to control MRP in another way. The two mostcommon reasons the planner may want to control the planning process might be:

1. Increase inventory anticipating a time of high demand2. Smooth out sales forecast. Generally sales forecast are given in monthly quantities, and

the planner must determine how to build this quantity and fit the work into theircapacity planning

Many times it is necessary to build inventory above zero in anticipation of futurerequirements. We do not want to put work orders in the system for these, nor do we want to putfirm planned orders into the system. Both of these solutions have the effect of using bills ofmaterial at the time they are created. Any changes to bills after their creation will not be realized.This can be a good effect in some cases. If you want to freeze the way you want to build aparticular run of parts, you can either create a work order and/or a firm planned order and adjustthe parts on it. MRP will not alter these parts and these will used by the system to build the parentparts. However, this is generally not the case. We would want the current bill of material to used indetermining the components at the time our work order is created.




In the case of sales forecasts, master schedules override them. This means that MRP logicwill be used for master schedules regardless of the sales forecast. The planner must be aware of thesales forecast and make sure that their master schedule covers any forecast quantities.

How a master schedule affects MRP logic is shown in the cases below.

Case 3A

PORT 10 ACCOUNT jess5.0 MS.MAINT THURSDAY 06/24/99 10:41------------------------------------------------------------------------------- *) Part Number 0537-0102-00010 MM TEST PART Unit of Measure EA Safety Stock Pur/Mfg M Eoq Pur Lead Time 0 Min Order Qty Mfg Lead Time 1 Mlt Order Qty Order Policy Max Order Qty Nbr Days Supply

1) Master Schedule Date 2) Quantity 3) Reference \\\\\\\\ \\\\\\\ \\\\\\\\\\ 1 06/25/99 55 jt 2 3 4 5 6 7 8




PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH 55


OPEN ORDPLAN ORD 55

PROJ INV 0 0 55 55 55 33 33 18 18

AVL PROM 18

F-Fwd,B-Bck: :




In this case, MRP did not find a firm time fence. It then planned the master schedulequantities exactly as found on the MS.MAINT screen. We had on entered 55 due on 6/25. We cansee that MRP put a plan for exactly 55 parts on that day. This projected quantity is then availablefor subsequent periods as inventory to cover demand. In this case we have sufficient quantity tocover the sales orders on 6/28 and on 6/30.

Case 3B

We will look at another case where we have master scheduled the same quantity, but it’sdue date is after the sales order requirements.






PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH 55


OPEN ORDPLAN ORD 55

PROJ INV 0 0 0 0 0 -22 33 18 18

AVL PROM -22 40

F-Fwd,B-Bck: :




In this case, MRP could not move inside the master schedule date of 6/29 and plan for theshortage of 22 parts on 6/28. It did plan exactly the master schedule quantity on 6/29 and this wassufficient for the shortage from 6/28 plus the requirements on 6/30. Again, your TICKLER wouldtell you to accelerate the plan from 6/29 to 6/28.

Case 3C

In this example we will look the case where the master schedule does not cover thequantity required. This will show where the plans will be generated.






PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH 17



PROJ INV 0 0 0 0 0 -22 -5 0 0

AVL PROM -22 17 5

F-Fwd,B-Bck: :




In this example, we have 22 parts required on 6/28. There is a master schedule later thanthis date, hence MRP can not plan for this shortage. On 6/29, MRP plans the master schedulequantity of 17. Again, MRP can not plan for the shortage as it is on or before the last masterschedule date. There is a shortage of 5 parts after the plan on 6/29 that matches the masterschedule. This shortage carries over into the next period. MRP can now plan this period. Withrequirements of 15 plus a shortage of 5, makes a total of 20 parts required. Hence, MRP hasplanned the 20 parts to bring the projected balance back to zero in the first available period.

Case 3D

We now need to add some work orders to the mix of activity. The work orders set a timefence in which neither MRP can plan, nor are your master schedules planned. The first examplewill look at a work order after your master schedule date.




PORT 10 ACCOUNT jess5.0 WORK.ORDERS THURSDAY 06/24/99 14:18------------------------------------------------------------------------------- *) Work Order Number 1555 Work Order Status

1) Part Number 0537-0102-00010 MM TEST PART

2) Fwd/Bck Schedule b

3) Backflush Y

4) Reference Number

5) Start Date 06/24/99 Original Issue Date 06/24/99

6) Complete Date 06/29/99 Original Complete Date 06/29/99

7) Quantity to Mfg 17 Quantity Scrapped

8) Min Quantity Reqd 17 Quantity Complete 0







PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH 200



PROJ INV 0 0 0 0 0 -22 -5 0 0

AVL PROM -22 17 5

F-Fwd,B-Bck: :

In this case, we have a master schedule for 200 pieces on 6/26. We also have a work orderon 6/29, so the master schedule is ignored. No MRP planning takes place for this master schedule.Perhaps a work order was opened for this master schedule some time ago, and the work completed,and shipped to customers. In any case, the inventory is not on hand, and the master schedule hasfallen behind the firm time fence set by the work order on 6/29. The is a shortage on both 6/28 and6/29. Since MRP can not plan on or before a firm time fence (nor a master schedule fence), thefirst period that MRP can add a plan is on 6/30. It has done so, adding a plan for 20 parts andmaking the projected balance zero.

Case 3E

A more likely scenario would be for your work order to cover existing requirements, andyou master schedule controlling demand beyond that horizon. It would look like,



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH 200



PROJ INV 0 0 0 0 0 0 0 -15 185




AVL PROM -15 200

F-Fwd,B-Bck: :

In this example, we find that the work order matches the sales order requirements on 6/28.Hence the projected balance is zero at the end of the day. MRP finds a shortage on 6/30, but thisday is before the master schedule date of 7/1. Hence MRP can not plan for the shortage. On 7/1,MRP plans the master schedule quantity of 200, which now covers requirements.

Case 3F

We will now look at a case where the master schedule quantity does not coverrequirements.



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECASTMSTR SCH 10



PROJ INV 0 0 0 0 0 0 0 -15 -5

AVL PROM -15 10 5

F-Fwd,B-Bck: :

We have just adjusted the master schedule quantity in the last example from 200 to 10. Thisleaves a shortage of 5 on 7/1. MRP can not plan inside the master schedule date, hence theshortage must get carried forward to the next day. On 7/2, MRP can add plans (past the masterschedule date) and hence it has added a plan for 5 parts, bringing the projected balance to zero.

SECTION X – sales forecasting

Case 4A Enter a simple forecast with a couple of sales orders. Typically sales forecast are entered

as a quantity that is expected to sell and represents this quantity once a month. For the exampleshere, I have shortened that time period so that we can see all of the details on one screen. I haveentered the following data into our SF.MAINT screen.




PORT 10 ACCOUNT jess5.0 SF.MAINT THURSDAY 06/24/99 15:30------------------------------------------------------------------------------- *) Part Number 0537-0102-00010 MM TEST PART Unit of Measure EA Safety Stock Pur/Mfg M Eoq Pur Lead Time 0 Min Order Qty Mfg Lead Time 1 Mlt Order Qty Order Policy Max Order Qty Nbr Days Supply

1) Sales Forecast Date 2) Quantity 3) Reference \\\\\\\\ \\\\\\\ \\\\\\\\\\ 1 06/25/99 40 jt 2 07/02/99 40 jt 3 4 5 6 7 8


I have left the two sales orders as they were previously, but we do not have any masterschedules nor work orders in this example. We want to show how the system generates demand atthis point first.



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECAST 40 40MSTR SCH


OPEN ORDPLAN ORD 3 22 15 40

PROJ INV 0 0 0 0 0 0 0 0 0

AVL PROM 3 40

F-Fwd,B-Bck: :

Since there is no master schedule, the sales forecast will be used by MRP. The quantityforecasted on 6/25 is for 40 pieces. MRP adds all of the sales order quantities and subtracts thetotal from the forecasted quantity (in other words that much of the forecast has already been sold).In this case we have sales order quantities of 22 (6/28) and 15 (6/30) giving a total of 37 partsalready sold. There are no other sales order quantities starting on 6/25 and ending on 7/1 (the daybefore the next forecast). Hence, the net sales forecast is 40 (forecasted) less 37 (sold already)leaving a net quantity of 3 parts. MRP then plans for the remaining 3 parts. The next forecast is on7/2 and we do not have any additional sales orders, so MRP planned all 40 parts.




Case 4B

The same case as above, except that a work order has been added to make the parts for thefirst sales order quantity.



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECAST 40 40MSTR SCH


OPEN ORD 22PLAN ORD 3 15 40

PROJ INV 0 0 -3 -3 -3 -3 0 0 0

AVL PROM 3 40

F-Fwd,B-Bck: :

The exact same formula is used to calculate the net forecast. We still need to plan for anadditional 3 parts and MRP wants to plan them for 6/25. However, we have a firm time fence on6/28 set the by the work order. Hence, MRP had to wait until 6/29 to make up the 3 parts we wereshort.

Case 4CIn this case we have added a master schedule, before our first sales forecast. Presumably,

the planner was attempting to build the parts before the entire sales forecast hit on 6/25.



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECAST 40 40MSTR SCH 15


OPEN ORD 22PLAN ORD 3 15 40

PROJ INV 0 0 -3 -3 -3 -3 0 0 0

AVL PROM 3 40




F-Fwd,B-Bck: :

Since the master schedule was before the sales forecast, the sales forecast logic was stillapplied. Also the master schedule is inside a firm time fence, so MRP has not planned any parts inthis case for the master schedule. Hence, MRP could only plan for the 3 parts still expected for theforecast, in the first available period (after the firm time fence).

Case 4D

In this case, we will move the master schedule up to the same day as the sales forecast. Ifsales forecast dates fall inside of a master schedule fence, they are then ignored.



PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECAST 40 40MSTR SCH 15



PROJ INV 0 0 -3 -3 -3 -3 -3 -3 -3

AVL PROM 40

F-Fwd,B-Bck: :

This case is a bit more complex. First note that the first sales forecast (on 6/25) falls underthe master schedule fence and is ignored by MRP. There is no net forecasting done as far as MRPis concerned. The ATP screen will show a projected balance of –3 parts, because of the potentialshortage from the forecast, but basically none of it is planned for by MRP. Next note that themaster schedule falls inside of the firm time fence, and hence MRP does not plan it. Since theforecast and master schedule is ignored on 6/25 (inside the firm time fence), MRP only plans forthe requirements on 6/30 on out.

Case 4E

A more likely scenario. One of the basic uses of a master schedule is to smooth out a salesforecast, and most likely beyond your firm time fence.






PAST 06/24 06/25 06/26 06/27 06/28 06/29 06/30 07/01 07/02

FORECAST 40 40MSTR SCH 10 10 10


OPEN ORD 22PLAN ORD 10 10 10 25

PROJ INV 0 0 -3 -3 -3 -3 7 2 12

AVL PROM 10 -5 10 25

F-Fwd,B-Bck: :

In this case the planner has release the work order for the parts on 6/28. They are alsogetting a jump on the forecasted quantities for 7/2 by building 10 parts each day on 6/29,6/30, and7/1. All of these are after the firm time fence, hence MRP can plan the 10 parts each day. The Atpscreen is a bit misleading in this case due to the concern over the unsold forecast quantity. The usermust manually analyze this information as follows:

At end of 6/28 the true projected balance is zeroAt end of 6/29 the true projected balance is 10At end of 6/30 the true projected balance is 5 (start with 10, add 10 in plan, use 15)At end of 7/1 true projected is 15 (start with 5, add 10 from plan)At end of 7/2 true projected balance is zero. (start with 15, use 40 in forecast, plan 15)

SECTION XI – Intermediate parts

To understand how sub-assemblies are treated by MRP, we must first determine how MRPdetermines what parts are required for top level assemblies and at what date.




MLB MULTI-LEVEL BILLS OF MATERIAL 06:45:30 26 Jun 1999 PAGE 1

LEVEL/PART DESCRIPTION UM SCRAP MOA CD LT DAY SHRINK CLT

0 0537-0102-00010 KDF ROOF CURB CRRFCURB001A00 EA

1 .......... 0537005A WOOD BLOCK, 1" X 4" X 6" 2.0000 EA MOA MFG 0 discrete 5 2 ........ 9911-0008 WOOD, 1" X 4" 0.5000 LFT PUR 0 discrete 5 1 ........... 0537006B ENDS 2.0000 EA MOA MFG 0 discrete 5 2 .......... 9910-0103 NAIL,"T", 1"X.097", CARBON ST 3.0000 EA PUR 2 discrete 7 2 .......... 9911-0008 WOOD, 1" X 4" 3.0990 LFT PUR 0 discrete 5 2 .......... 9911-1086 END 537 CURB 407/16X185/16 16 1.0000 EA PUR 10 discrete 15 1 ........... 0537007A SIDES 2.0000 EA MOA MFG 0 discrete 5 2 .......... 9910-0103 NAIL,"T", 1"X.097", CARBON ST 5.0000 EA PUR 2 discrete 7 2 .......... 9911-0008 WOOD, 1" X 4" 5.6150 LFT PUR 0 discrete 5 2 .......... 9911-1085 SIDE 537/538 CURB 705/8X185/1 1.0000 EA PUR 10 discrete 15 1 ........... 05370102A SHEET METAL PARTS 1.0000 EA MFG 5 discrete 10 2 .......... 0537001B DECK PAN A 3.0000 EA MOA MFG 0 discrete 10 3 ......... 9910-0142 100-1 1" GRIPNAIL F/1" DUCT L 3.0000 EA PUR 2 discrete 12 3 ......... 9911-0020 STEEL 20 GA. (PER POUND) 4.9810 LB 0.300 PUR 10 discrete 20 2 .......... 0537002B DECK PAN B 1.0000 EA MOA MFG 0 discrete 10 3 ......... 9910-0142 100-1 1" GRIPNAIL F/1" DUCT L 3.0000 EA PUR 2 discrete 12 3 ......... 9911-0020 STEEL 20 GA. (PER POUND) 4.9810 LB 0.300 PUR 10 discrete 20 2 .......... 0537003C SUPPORT, CENTER DUCT 1.0000 EA MOA MFG 0 discrete 10 3 ......... 9911-0020 STEEL 20 GA. (PER POUND) 1.7260 LB 0.300 PUR 10 discrete 20 2 .......... 0537004B SUPPORT, DUCT 1.0000 EA MOA MFG 0 discrete 10 3 ......... 9911-0020 STEEL 20 GA. (PER POUND) 1.1480 LB 0.300 PUR 10 discrete 20 2 .......... 0552003B BRACKET, CORNER 4.0000 EA MOA PUR 0 discrete 10 3 ......... 9911-1152 BRACKET, CORNER 0552003B F/ 1 1.0000 EA PUR 10 discrete 20 1 ........... 0537025A LABEL, ID, BARCODE 1.0000 EA MOA MFG 0 discrete 5 2 .......... 9100-0133 LABEL, LAZER PAPER, 3/SHEET 0.3300 EA PUR 5 discrete 10 1 ........... 9100-0213 INSTALL INSTR. #0486-16P, 053 1.0000 EA PUR 3 discrete 8 1 ........... 9430-0100 GASKETING, 1/4"X1-1/2"X25', F 1.0000 RL PUR 14 discrete 19 1 ........... 9908-0123B HARDWARE BAG F/537,597,528 16 1.0000 EA PUR 10 discrete 15 2 .......... 9908-0073 BAG, PLASTIC, FLAT POLY, 4"X4 1.0000 EA PUR 3 discrete 18 2 .......... 9910-0035 #10X1/2 HWH SHEET METAL SCREW 4.0000 EA PUR 4 discrete 19 2 .......... 9910-0049 SCREW, #14X1/2, SLOTTED/UNSLO 16.0000 EA PUR 4 discrete 19 1 ........... 9910-0141 CABLE TIE, 18" RTH 1700 1.0000 EA PUR 4 discrete 9 1 ........... 9911-2001 INSULATION, 37.125X8.75 F/ 05 4.0000 EA MOA MFG 5 discrete 10 2 .......... 9911-1109 INSULATION, 1"X50"X100', DUCT 2.2560 SQF PUR 14 discrete 24 1 ........... 9912-0002 STRAP, STEEL, 1/2"X.020, WT 1 0.1980 LB PUR 3 discrete 8

We have shown a MLB printout for the final assembly “0537-0102-00010” for reference.We have high lighted parts with similar characteristics. All of the blue high lights show purchasedparts. One part of interest is 0552003B. It is currently flagged as “purchased”, but has a bill ofmaterial and is flagged as a MOA part. Both of these items will be ignored by MRP. If a part isflagged as “purchased”, it will be treated as such and any bill of material and/or other flags (suchas MOA) will be ignored.

All of the green high lights reference parts that are flagged as “manufactured” and alsoflagged a MOA (make on assembly). This flag is set on the PARTS.MFG screen, in a field withthe same name. This tells MRP to not plan (or even look at) this part, and instead use it’s bill ofmaterial to develop the component list. For example, in the case of 0537005A, this part will notshow up as a required component. Instead, it’s component 9911-0008 shows up as a required part.

The yellow high lighted part is the only manufactured part that will show up on thecomponent list.

The component list for a parent part number should be thought of as a list of part that arerequired to build the final assembly. Someone should be able to go the shop floor and retrieve allof these parts, and build a parent part number. The component list for a planned order will becomethe “picklist” for a work order.

The above MLB is important as we start to investigate the sub-assembly parts and howMRP treats them. We will look at one of the plans for our parent part number “0537-0102-00010”.

We have been reviewing activity for our parent part number in daily type summaries. Wenow need to know the details behind these daily summaries. By looking at “MS.ACTIVITY” or“ACTIVITY”, we can see some of this detail. The following is a listing of MS.ACTIVITY.




MS.ACTIVITY MASTER SCHEDULE PART ACTIVITY 08:55:42 28 Jun 1999 PAGE 1

PART NBR: 0537-0102-00010 DESC: KDF ROOF CURB CRRFCURB001A00

ON HAND: 2REC/INSP: NON NET QTY: 0 S/S: PREV BALANCE: 2

DATE TYPE PLN# REFERENCE REF QTY IN OUT BALANCE

06/28/99 PL 104 2 06/26/99 10 12 06/28/99 SO 149055 22 -10 06/28/99 MS 10 06/29/99 PL 105 2 06/26/99 10 0 06/29/99 MS 10 06/30/99 PL 106 2 06/26/99 10 10 06/30/99 SO 149055 15 -5 06/30/99 MS 10 07/01/99 PL 107 2 06/26/99 10 5 07/01/99 MS 10 07/02/99 PL 108 2 06/26/99 10 15

PRESS RETURN TO CONTINUE, END OR TOP :

We are interested in looking at the details for one of the plans, to see what MRP thoughtwas required for this plan. We will look at the first plan. This plan number is 104. There is nosignificance to the plan number. It is a way that MRP keeps track of the plan and will change eachtime MRP is run. The plan number is just a sequential number (each part has it’s own sequentialcounter).

First we should look at the details for this plan. We will use the PLO.MAINT screen toview some of these details.

PORT 10 ACCOUNT JESS5.0 PLO.MAINT MONDAY 06/28/99 08:58------------------------------------------------------------------------------- *) Part Number 0537-0102-00010 KDF ROOF CURB CRRFCURB001A00 *) Plan Number 104

Start Date 06/21/99 Start Qty 10 Due Date 06/28/99 Required Qty 10

1) Component Part Description 2) Quantity \\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ \\\\\\\\\\1 05370102A SHEET METAL PARTS 102 9430-0100 GASKETING, 1/4"X1-1/2"X25', FOAM TA 103 9908-0123B HARDWARE BAG F/537,597,528 16-14X1/ 104+ 9910-0103 NAIL,"T", 1"X.097", CARBON STEEL/HE 100

3) Bin Part Description 4) Quantity \\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ \\\\\\\\\\1 9100-0133 LABEL, LAZER PAPER, 3/SHEET 32 9100-0213 INSTALL INSTR. #0486-16P, 0537-0102 103+ 9910-0141 CABLE TIE, 18" RTH 1700 10

Modifications 1-4, TOP-exit wo/update, END-file, \\\\\\\\ ^^-repaint screen, ?-help

The first thing to note on this plan is the start date. We described earlier how start dates arecalculated based on the lead time and the number of working days. This plan is to be stated on6/21/99. This is the day that all of the components are to be in inventory.




The next thing to note is the list of components that are required to build this parent part.These are listed under the first field, called “component parts”. The corresponding quantityrequired to build this plan is listed on the right hand side. If we review the first couple of parts, wecan track how these parts show up in our ACTIVITY screens.

The first part is our manufactured sheet metal part. It’s ACTIVITY screen looks like:

ACTIVITY ACTIVITY FOR INVENTORY PART 09:04:15 28 Jun 1999 PAGE 1

PART NBR: 05370102A DESC: SHEET METAL PARTS LT CODE: M SAFETY STK: ON HAND: 199 NON NET QTY: 0 REC/INSP: PREV BALANCE: 199

DATE TYPE PLN# REFERENCE IN OUT BALANCE

06/21/99 RQ PP 0537-0102-000 10 189 06/22/99 RQ PP 0537-0102-000 10 179 06/23/99 RQ PP 0537-0102-000 10 169 06/24/99 RQ PP 0537-0102-000 10 159 06/25/99 RQ PP 0537-0102-000 10 149

END OF LIST

ENTER PART NUMBER, 'END' OR 'TOP' :

We can see that we have a “RQ” (requirement) on 6/21 for 10 pieces that is referencingparent part number 0537-0102-00000. This tells MRP that 10 pieces are needed on 6/21 for aparent part number and must be planned. In this case, we have 199 pieces in inventory, whichmore than covers our requirements, (this is due to this being test data, normally you should haveonly enough sheet metal parts to match requirements, since we do not stock these).

If we review the next part on our component list, we see the activity for a purchased partcalled 9430-0100.


PART NBR: 9430-0100 DESC: GASKETING, 1/4"X1-1/2"X25', FOAM TAPE LT CODE: P SAFETY STK: 200 ON HAND: 1064 NON NET QTY: 0 REC/INSP: PREV BALANCE: 864


06/21/99 RQ PP 0537-0102-000 10 854 06/22/99 RQ PP 0537-0102-000 10 844 06/23/99 RQ PP 0537-0102-000 10 834 06/24/99 RQ PP 0537-0102-000 10 824 06/25/99 RQ PP 0537-0102-000 10 814

END OF LIST





Again, we can see the “RQ” requirement on 6/21 for 10 pieces.

All of component items for a plan will show up on the ACTIVITY screen, based on theirassociated bill of material quantity. The date the parts are due will be equal to the start date of theplan (or also the work order). These requirements are then planned, independently at each level inthe bill of material. This is done so that all requirements for part, in a planning period, can belumped together and planned for by MRP.

In our PLO.MAINT screen shown above, we should also note the effect of the “bin” flag.A bin flag is set for parts that we do not want to have planned orders for and we do not generallyplan these items. Gross requirements for bin items can be found with a fastkey calledBIN.ITEM.REQ. This report is offered to show gross requirements by month. Generally bin itemsare items that need not be planned day by day, or are managed by a vendor. Generally, inventoryaccuracy is not a factor for these parts. Examples of bin items are bolts, nuts, gaskets, and othershop supplies. If a vendor controls the inventory, as in the case of some steel and wood vendors, itmay be a wise idea to convert this items to bin items. The vendor will maintain the stocking levelsand ensure that sufficient parts are available. The system does track the number of bin partsrequired, as shown on the PLO.MAINT screen (high lighted in blue). However, if you were to lookat an ACTIVITY screen for one of these parts, we would see.


PART NBR: 9100-0133 DESC: LABEL, LAZER PAPER, 3/SHEET LT CODE: P SAFETY STK: 1000 ON HAND: 1121 NON NET QTY: 0 REC/INSP: PREV BALANCE: 121

[ACTIVITY INV170 5.0] RETURN TO CONTINUE :NO INVENTORY PLANNING FILE RECORD FOR PART NBR: 9100-0133

This means that MRP has ignored the part and further planning will be done.




If the component part is to be planned and controlled by MRP, it is planned for by MRPindependently, as MRP works down through the levels in the bill of material. Again, MRP starts atthe top level, processing all parts at that level, and then moves down through all the levels in yourbills of material. If we go back to our example of the sheet metals parts, and adjust the quantity onhand so that we can see MRP plan the part, we see:


PART NBR: 05370102a DESC: SHEET METAL PARTS LT CODE: M SAFETY STK: ON HAND: NON NET QTY: 0 REC/INSP: PREV BALANCE: 0


06/21/99 RQ PP 0537-0102-000 10 -10 06/22/99 RQ PP 0537-0102-000 10 -20 06/23/99 RQ PP 0537-0102-000 10 -30 06/24/99 RQ PP 0537-0102-000 10 -40 06/25/99 PL 727 2 06/26/99 50 10 06/25/99 RQ PP 0537-0102-000 10 0

END OF LIST


These are the results from an MRP run on 6/26/99 (as shown in the plan reference). Thefirst planning period was 6/26 minus one backoff day (set up in MCF, MRP150.PER). This is thefirst planning period that MRP can put a plan into, hence we have a shortage at the end of each dayup to 6/25, and MRP has planned the entire shortage of 50 parts. This is a classic example of howyou should maintain your planning horizon at the top level. The requirements for the parts arebacked up by the lead time on those parts. All of this activity is basically past due, and you nor thesystem can plan for this activity. The problem is worse as we look at the next level. If we look atthe PLO.MAINT screen for plan 727, we see:

PORT 10 ACCOUNT JESS5.0 PLO.MAINT MONDAY 06/28/99 11:06------------------------------------------------------------------------------- *) Part Number 05370102A SHEET METAL PARTS *) Plan Number 727

Start Date 06/18/99 Start Qty 50 Due Date 06/25/99 Required Qty 50

1) Component Part Description 2) Quantity \\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ \\\\\\\\\\1 9910-0142 100-1 1" GRIPNAIL F/1" DUCT LINER 1502 9911-0020 STEEL 20 GA. (PER POUND) 753 9911-1152 BRACKET, CORNER 0552003B F/ 14" CUR 2004

3) Bin Part Description 4) Quantity \\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ \\\\\\\\\\123





As we can see, the start date for this plan has been moved back by the lead time for thesheet metal part. Keep in mind that the due date is already later than we need, but was set to to6/25 because it is the first planning period. Now we look at the component parts for this plan, wesee:


PART NBR: 9910-0142 DESC: 100-1 1" GRIPNAIL F/1" DUCT LINER LT CODE: P SAFETY STK: 0 ON HAND: NON NET QTY: 0 REC/INSP: PREV BALANCE: 0


06/18/99 RQ PP 05370102A 600 -600 06/25/99 PL 177 2 06/26/99 600 0

END OF LIST

ENTER PART NUMBER :

Again, MRP can put a plan in 6/25, it’s earliest planning period. This is still too late for thesheet metal plan, and it will be late for 0537-0102-00010 plan as well. Hence, your firm planninghorizon should be at least as long as your cumulative lead time through all levels of your bill ofmaterial. In the case of a 0537-0102-00010, this is 24 working days (on the right column of a MLBprintout shown above). Remember, this is 24 working days, according your shop calendar. Thiswill result in almost 5 weeks of planning. This means that your master schedule at the top levelshould be around 5 weeks at a minimum, and may be longer based on the future requirements forthis part. This 5 week horizon can be shortened, if we are using some other method to determine orinventory strategy for some parts. If we are using safety stock policy on the long lead times thatwill ensure several weeks of supply (based on history), we may be able to ignore the lead time forthat part. If we do not use this other type of ordering strategy, any activity on 0537-0102-00010inside of the 5 weeks will result in some activity not being planned according to our lead times.Basically, if the work orders and/or purchase orders are not completed in less than the lead timeson the parts, you will have a shortage of parts and the final assembly will not be completed ontime.

Section XII purchased parts

Basically, MRP treats purchased parts just as any other part in the system. However, it ismore common to see order policies at this level. There are many cases of vendors selling parts inboxes, skids, cartons, and other lot sizes. However, we should look at the basics first anddetermine how MRP is dealing with some purchasing issues.




All open purchase orders show up on your ACTIVITY screen. These are assumed to bereceived into inventory on the promised delivery date from the purchase order. The purchase orderpromised dates should represent the date the part will be in-house and available. The followingshows how a purchase order and corresponding ACTIVITY screen look.

PORT 10 ACCOUNT jess5.0 PURCHASE MONDAY 06/28/99 13:08------------------------------------------------------------------------------- *) PO Nbr 20001 *) Item Nbr 1 1) Line Type P 2) Part#/Gl#/WO# 9910-0142 100-1 1" GRIPNAIL F/1" DUCT LI 3) Outplant or Material 4) Routing Seq Nbr 5) Description 100-1 1" GRIPNAIL F/1" DUCT LINER 6) Order Unit Of Measure EA 7) Conv Factor 8) Manufacturers Part Nbr 100-1 Standard Um EA 9) Deliver To Balance Due 2010) Inspection Required?11) Blanket Qty 12) Blanket Expiration Date13) Requested Date 14) Promise Date 15) Quantity 16) Unit Price \\\\\\\\ \\\\\\\\ \\\\\\\ \\\\\\\\\\\\1 07/01/99 07/01/99 20 0.03802317) Special Instructions \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ 1 2 3Modifications NI=New 1-17, TOP-exit wo/update, END-file, \\\\\\\\ DELETE-delete, ^^-repaint screen, ?-help, REV-Revision




06/18/99 RQ PP 05370102A 600 -600 07/01/99 PO 20001*1 20 -580

END OF LIST


MRP will now act one of two ways, depending on how the MCF flag called “po.plan.flag”is set. Purchase orders can be treated as setting your firm time fence, just as a work order does.This is generally the way you want your system set. See the example above to see this item. If werun MRP with the flag set, we see:







06/18/99 RQ PP 05370102A 600 -600 07/01/99 PO 20001*1 20 -580 07/02/99 PL 178 2 06/26/99 580 0

END OF LIST


In this example, the purchase order at 7/1 has set a firm time fence. MRP is not able to planinside of this date, and hence the shortage continues until 7/2. In the first planning period that MRPcan plan, it puts a plan (planned purchase order) for the 580 that we are short. Just as we saw in themanufactured part example, the TICKLER report would report an “accelerate” message for thisplan.

If we had turned the “time fence option off” (in our MCF, PO.PLAN.FLAG), we wouldhave seen MRP ignore the purchase order and plan accordingly. The results would have lookedlike:




06/18/99 RQ PP 05370102A 600 -600 06/25/99 PL 179 2 06/26/99 600 0 07/01/99 PO 20001*1 20 20

END OF LIST


In this case, MRP has put the plan in the very first planning period (6/25), but this results ina shortage from 6/18 until 6/25. The TICKLER report would still report a shortage.




There can be some confusion in purchase orders. There is a feature in purchasing whichallows you to buy the product in a different unit of measure than you stock it in. The processdescribe above is the same, except that the ACTIVITY screen always references “stocking” unit ofmeasure, and our purchase order can reference a “buying” unit of measure. Such is the case withpart number 9430-2000. In this case,

PORT 10 ACCOUNT jess5.0 PURCHASE MONDAY 06/28/99 13:28------------------------------------------------------------------------------- *) PO Nbr 20002 *) Item Nbr 1 1) Line Type P 2) Part#/Gl#/WO# 9430-2000 GASKETING, 5/8"X3/4"X20', 2LB. 3) Outplant or Material 4) Routing Seq Nbr 5) Description GASKETING, 5/8"X3/4"X20', 2LB. URETHANE 6) Order Unit Of Measure RL 7) Conv Factor 20.0000 8) Manufacturers Part Nbr TU0210121 REV.NS Standard Um FT 9) Deliver To Balance Due10) Inspection Required?11) Blanket Qty 12) Blanket Expiration Date13) Requested Date 14) Promise Date 15) Quantity 16) Unit Price \\\\\\\\ \\\\\\\\ \\\\\\\ \\\\\\\\\\\\1 07/01/99 07/01/99 24 0.08802317) Special Instructions \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ 1 2 3Modifications NI=New 1-17, TOP-exit wo/update, END-file, \\\\\\\\ DELETE-delete, ^^-repaint screen, ?-help, REV-Revision

The resulting ACTIVITY screen then looks like:ACTIVITY ACTIVITY FOR INVENTORY PART 13:30:04 28 Jun 1999 PAGE 1

PART NBR: 9430-2000 DESC: GASKETING, 5/8"X3/4"X20', 2LB. URETHAN LT CODE: P SAFETY STK: 1000 ON HAND: 2579 NON NET QTY: 0 REC/INSP: PREV BALANCE: 1579


07/01/99 PO 20002*1 480 2059

END OF LIST


The stocking quantity is calculated as the 24 rolls ordered on the purchase order times theconversion factor of 20 feet per roll, also listed on the screen. The conversion factor andcorresponding unit of measure description are kept as defaults in the PARTS.ENG screen as shownbelow:




PORT 10 ACCOUNT jess5.0 PARTS.ENG MONDAY 06/28/99 13:32-------------------------------------------------------------------------------

*) PART NUMBER 9430-2000 1) Description GASKETING, 5/8"X3/4"X20', 2LB. URETHANE TAPE 2) Stock U/M FT 3) Pur/Mfg (P/M) P 9) Class Code 4) Pur Lead Time 16 10) Product/Model 5) Mfg Lead Time 0 11) Buyer/Planner 6) Multi Loc Flag 12) Purch U/M RL 7) Lot Ctrl Flag 13) U/M Conv Fctr 20.0000 8) Drawing Status A 14) Inv Type 4

15) Drawing Nbr 16) Dwg Sht 17) Dwg Type 18) Dwg Size 19) Dwg Rev \\\\\\\\\\\\\\\ \\ \\\\\ \\ \\1220) Ven Nbr Vendor name 21) Mfg Name 22) Mfg Part Number \\\\\\ \\\\\\\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\ \\\\\\\\\\\\\\\\\\ 1 898 REED RUBBER COMPANY TU0210121 REV.NS 2


These factors will default onto the PURCHASE screen, but can be over-ridden if necessary.One such case might be when purchasing from an alternate vendor, and they have 30 feet on a roll.The purchase order factor should be changed. It should be noted that when the purchase order isreceived with PO.RECEIPTS, the 480 feet will be put into inventory. This factor, on the purchaseorder, must be correct. The PARTS.ENG factor only sets default to use on the PURCHASEscreen.

Another important issue to understand concerning purchase orders is the affect on, or how,MRP handles blanket purchase orders. The following is how a purchase order might look:

PORT 10 ACCOUNT jess5.0 PURCHASE MONDAY 06/28/99 13:44------------------------------------------------------------------------------- *) PO Nbr 19338 *) Item Nbr 1 1) Line Type P 2) Part#/Gl#/WO# 9911-1111 1/2" X 48" X 100' TUF/SKIN RX 3) Outplant or Material 4) Routing Seq Nbr 5) Description 1/2" X 48" X 100' TUF/SKIN RX INSULATION 6) Order Unit Of Measure RL 7) Conv Factor 400.0000 8) Manufacturers Part Nbr Standard Um SQF 9) Deliver To Balance Due10) Inspection Required?11) Blanket Qty 1000 12) Blanket Expiration Date 12/31/9913) Requested Date 14) Promise Date 15) Quantity 16) Unit Price \\\\\\\\ \\\\\\\\ \\\\\\\ \\\\\\\\\\\\1 07/01/99 07/01/99 100 123.49002 12/31/99 12/31/99 900 123.4900317) Special Instructions \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ 1 6/29 jst : release 1 on 7/1/99 2 3Modifications NI=New 1-17, TOP-exit wo/update, END-file, \\\\\\\\ DELETE-delete, ^^-repaint screen, ?-help, REV-Revision

In this case, the first release has been made for 7/1 for 100 rolls. The ACTIVITY screenlooks like this for this part.





PART NBR: 9911-1111 DESC: 1/2" X 48" X 100' TUF/SKIN RX INSULATI LT CODE: P SAFETY STK: 0 ON HAND: -9472 NON NET QTY: 0 REC/INSP: PREV BALANCE: -9472


06/28/99 RQ PP 4400b-2124-2a 209 -9681 07/01/99 PO 19338*1 40000 30319 12/31/99 PO 19338*1 360000 390319

END OF LIST


In this case, we see the 7/1 release and the balance of the blanket on 12/31. Most buyersreserve 12/31 as their blanket dates. They will realize that this is the blanket just by the date. Thisis another case of purchasing units of measure being used, as the purchase quantity does not matchthe activity screen due to the conversion factor.

MRP will not be planning inside the blanket ending date, since this purchase orders sets thefirm time fence. In almost all cases, the blanket quantity will cover the activity for the partanyway. Hence, MRP will not be putting any additional plans out there. Instead, you will need tomonitor your TICKLER report, especially your “accelerate” messages. We have displayed thetickler messages with a standard pop up window to see the messages for just this part number.

PORT 10 ACCOUNT jess5.0 PARTS.MFG MONDAY 06/28/99 14:06------------------------------------------------------------------------------- *--------------------------------------------------------------------------* *|Page 1 PT 14:06:07 28 Jun 1999 | 1| | 2|VENDOR.............. PO NBR QTY.... ORIG.... RSCHED.. ACTION.... | 3| DATE DATE | 4| | 5|REED RUBBER COMPANY 19338 40000 07/01/99 06/28/99 ACCELERATE | 6|REED RUBBER COMPANY 19338 360000 12/31/99 CANCEL CANCEL | 7| | 8|[405] 2 items listed out of 2 items. | 9| |10| |11| |12| |13| |14| |15| |16F-fwd,B-bck,ESC-exit--------------------------------------------------p1/1c117) Made On Assy




We see that the first release was due past the requirement date and hence MRP wants therelease accelerated from the current promised date of 7/1 to 6/28. You will always generally get acancellation message for the balance of your blanket. These can be ignored. If you get a plan afteryour blanket expiration date, you have requirements that exceed you blanket order.

Blanket purchase orders are a great vehicle to use with vendors who offer a better price forcommitting to a quantity over some period of time. Issuing a purchase order confirms thisagreement. Many times though, the releases are not processed in the system. While the receipts canbe processed as well as the invoices without any problem, we completely loose the visibility inmanufacturing that parts are on the way. Manufacturing should be working with purchasing, and atsome point, checking to make sure material is either available or in transit, and not releasing workorders where components are not available. If releases on purchase orders are not processed,manufacturing will not know that material is on the way, and will have no chance to plan ahead.

mrp ii - acspg.com mrp works through each planning period balancing projected inventory against...

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