Re: Re: Minimum balance for children

Interesting comments, all.......

Here's another viewpoint:

If many finished goods share a common child
and those finished goods all have a minimum balance
then MRP will have you order PLENTY of that child
and make the finished goods & store them.
Some of my clients feel it is better to not have 
too much minimum balance / safety stock of the finishd goods. Rather they have 
minimum balance of common components then make whatever finished goods they 
really
need Just In Time ( remember that one ? ).
Thus they don't have money tied up in finished goods
but rather have less money tied up in common components  

But
different solutions for different problems 
in different situations.

Have Fun !!

Jim Barry
Belchertown, MA

==============
> 
> From: Frederick C Davy <fcdavy@xxxxxxxxxxxx>
> Date: 2005/10/27 Thu AM 11:17:21 EDT
> To: "SSA's BPCS ERP System" <bpcs-l@xxxxxxxxxxxx>
> Subject: Re: [BPCS-L] Minimum balance for children
> 
> Daniel, 
> 
> Good answer, but I believe the saying is "Don't forecast what you can 
> calculate", The one other point I would make to pd is to be aware of 
> inserting multiple variables to your MRP logic. By that I mean if you are 
> planning requirements for end items (finished goods) in LOT QUANTITIES 
> (Order Policy code H, I, J), you have already affected your inventory 
> levels at replenishment to be greater than zero if your customers are not 
> required to order full lot quantities. To add a minimum balance variable 
> on top of that, you can further distort both the timing and the 
> replenishment balances (Minimum balance of 1000, lot quantity of 2500, as 
> soon as the projected balance is 999 or less, a planned order for 2500 
> will be created by BPCS. If you have no further movement on this item 
> before the replenishment order is received, you could conceivably have 
> 3499 in stock. Remember that you have over-planned all components to 
> support that level of inventory, and the timing of their re-order. This 
> could have a dramatic affect on cash flow and inventory cost/turns.) As 
> another saying goes, "do all things in moderation". 
> 
> Frederick C. Davy, CPIM, PMP
> Business Systems Analyst
> Interface Solution, Inc.
> Phone: (315) 592-8101
> Fax: (315) 592-8481
> e-mail: fcdavy@xxxxxxxxxxxx
> 
> 
> 
> 
> "Daniel Warthold" <daniel.warthold@xxxxxxxxxxxx> 
> Sent by: bpcs-l-bounces+fcdavy=sealinfo.com@xxxxxxxxxxxx
> 10/27/2005 09:56 AM
> Please respond to
> "SSA's BPCS ERP System" <bpcs-l@xxxxxxxxxxxx>
> 
> 
> To
> "SSA's BPCS ERP System" <bpcs-l@xxxxxxxxxxxx>
> cc
> 
> Subject
> Re: [BPCS-L] Minimum balance for children
> 
> 
> 
> 
> 
> 
> Good answer Al.
> 
> I'd like to add, there is a principle in materials management that reads
> "do not guess what you can calculate", (or something like that). This 
> means
> put the safety stock where you have uncertainty of the demand, (on the
> finished item in this case), and let MRP calculate the requirements on the
> components.
> 
> If you also had uncertainty on the components, like if they were also sold
> as spare parts, then you might want to cover this uncertainty with
> additionnal safety stocks on these components as  well.
> 
> Daniel Warthold P. eng CPIM
> 
> 
> 
> ----- Original Message ----- 
> From: "Al Mac" <macwheel99@xxxxxxxxxxx>
> To: "SSA's BPCS ERP System" <bpcs-l@xxxxxxxxxxxx>
> Sent: Thursday, October 27, 2005 5:13 AM
> Subject: Re: [BPCS-L] Minimum balance for children
> 
> 
> > Minimum balance on a parent does not cause any components to also have
> > minimum balance.  All it causes is for MRP to tell you to make to fill 
> the
> > minimum balance, like it is a special kind of order.
> >
> > Fact that you have a minimum balance on the parent means the MRP tells 
> you
> > to make or order enough stuff to fill that minimum balance, plus any 
> other
> > requirements.  If you do as MRP says, you will end up with on-hand for 
> the
> > parent item equal to the minimum balance, and zero on all the children,
> > because you met the requirements.
> >
> > We have minimum balance on end customer items where they can order from 
> us
> > with very short lead time.  So customer orders, we ship them out of the
> > safety stock, then manufacture to replenish it.
> >
> > We have minimum balance on some raw materials that are in heavy demand.
> >
> > We have considered minimum balance for the output from factory
> bottlenecks,
> > and where high setup involved.
> >
> > >   Hi, Can anybody tell whether it is required to maintain Minimum
> Balance
> > > for children when it is maintained for End Item (Master Scheduled) ?
> > > Because, child are already taken care through this topmost parent's 
> min.
> > > balance. regards, Prashanth
> >
> >
> > -- 
> > This is the SSA's BPCS ERP System (BPCS-L) mailing list
> > To post a message email: BPCS-L@xxxxxxxxxxxx
> > To subscribe, unsubscribe, or change list options,
> > visit: http://lists.midrange.com/mailman/listinfo/bpcs-l
> > or email: BPCS-L-request@xxxxxxxxxxxx
> > Before posting, please take a moment to review the archives
> > at http://archive.midrange.com/bpcs-l.
> >
> > Delivered-To: daniel.warthold@xxxxxxxxxxxx
> 
> -- 
> This is the SSA's BPCS ERP System (BPCS-L) mailing list
> To post a message email: BPCS-L@xxxxxxxxxxxx
> To subscribe, unsubscribe, or change list options,
> visit: http://lists.midrange.com/mailman/listinfo/bpcs-l
> or email: BPCS-L-request@xxxxxxxxxxxx
> Before posting, please take a moment to review the archives
> at http://archive.midrange.com/bpcs-l.
> 
> Delivered-To: fcdavy@xxxxxxxxxxxx
> 
> -- 
> This is the SSA's BPCS ERP System (BPCS-L) mailing list
> To post a message email: BPCS-L@xxxxxxxxxxxx
> To subscribe, unsubscribe, or change list options,
> visit: http://lists.midrange.com/mailman/listinfo/bpcs-l
> or email: BPCS-L-request@xxxxxxxxxxxx
> Before posting, please take a moment to review the archives
> at http://archive.midrange.com/bpcs-l.
> 
> Delivered-To: ZZBPCS@xxxxxxxxxxx
> 

Peace
JimB