Re: MRP500/MRP600

Dan,

Bulk items are usually at the bottom of the bill-of-material structure, 
and often are exposed to the effect of planning combined order policies of 
the upper levels that create excessive requirements for these lower level 
items. Throw in a good dose of minimum balance at the item level (they are 
cheap and you can not justify running out of them) and you easily have MRP 
direction to order too much. When parent items have period or lot 
quantities associated to them (order policy G, H, I, J) that will cause a 
certain level of "over-planning" as the inventory balances of these items 
will spike at  replenishment. This over-planning has passed the 
requirements for the associated "bulk" items down the B/M structure. If 
the bulk items have their own order policy that reflects standard lot 
sizes or PO minimum quantities, then you are factoring the already 
over-planned requirements by another variable. Now, throw on a dose of 
"Safety Stock" (Minimum Balance) at the bulk item level, and you have 
completely destroyed the credibility of the planning (remember, the road 
to Hell is paved with "good intentions"). Also, if your B/M's are not at 
least 95% accurate, MRP will multiply the error throughout the database. 

Bulk items are sometimes better just planned on a "Min/Max" level if your 
lead times for these items are relatively short (be aware of the fact that 
a so-called "bulk" item can be an "A" inventory item. I was a planner for 
a company that used electrical tie-wraps by the millions. The cost, at 
that time, was about $.001/ea., but due to the amount used, the item was 
one of our top 10% of inventory cost). If you need better MRP direction to 
justify ordering the bulk items, I would begin to look at the "where-used" 
for each of them, and then research the order policies and B/M's of those 
items. Don't forget to check for multiple planning variables for the 
parents (lot size AND minimum balance) that would inflate the 
requirements. Also check the accuracy of your lead times (both 
manufacturing and purchasing) since this would distort the timing of the 
resupply, therefore inflating inventory. Sorry, but there is no "short 
cut" for this project. Good luck.
 



"Daniel Wilkins" <dwilkins@xxxxxxx> 
Sent by: bpcs-l-bounces+amkavoulakis=sealinfo.com@xxxxxxxxxxxx
10/20/2005 09:54 AM
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[BPCS-L] MRP500/MRP600






We use these programs for our MRP system and our lot items are working
correctly but the bulk items are not planning correctly. Too many items
are getting planned based on the orders. I don't know that much about
how the BPCS MRP system works so can someone shed some light on where I
should start my search for a problem. We are on Version 6.1.01

 

Thanks,

Daniel