RE: Net Change MRP

Oct 6

As I responded earlier there is an add-on module to MAPICS, OTTO.  This module 
provides the capability to identify not only the actions to be taken for the 
new machine, but the impact this may have on existing machines in the backlog.  
OTTO is based on the principles Reality Based Priority (RPM)management.  The 
following is taken from an APICS article written by Dave Turbide on RPM.  The 
context of this article addresses the topic under discussion.

?But the frequent replanning has caused a whole new set of problems. While 
things might look better in the front office- there's an optimized plan in 
place that's as fresh as the last inquiry-it's total chaos in the plant The 
constant changes to plans and priorities whipsaw the production resources 
causing frequent setups, rework, inefficiency, and quality problems. 
 
As a result, many users of fast schedulers and advanced planning systems are 
now restricting their use and only regenerating the plan once per day- back to 
the batch thinking that we were trying to move beyond. Planning isn't really 
the problem. We have a whole range of planning solutions to fit every need and 
situation. The problem is on the execution side. 
 
Revving up execution
Current planning logic provides a comprehensive list of what must happen in 
order to complete customer orders on time, minimize inventory, and operate 
efficiently. In an ideal situation, things will happen just as they are 
planned-materials and components will arrive on time, there will be no 
unexpected scrap or unusable parts, production activities will proceed as 
expected, and customers will never change their orders after they're booked. 
 
This whole concept of planning (and advanced planning), however, stops short of 
providing much help on the execution side. Whatever the planning method or 
frequency, the procurement and production departments are left with 
instructions on what to do to support the overall plan-but not much in the way 
of context. In other words, which specific actions will affect which specific 
customer shipments? Plans are developed item by item. Tracing the impact of an 
action or a change-such as a late receipt or quality problem-is problematic. 
Starting at either the top (customer order) or the bottom {raw material) or 
anywhere in between, tracing demand involves pegging through the bill of 
material one level at a time and matching required quantities and dates to find 
the next level (component or parent item). The deeper the bill of material and 
the more products that use common components or assemblies, the more difficult 
it is to sort it all out and get the required answers. Some materials 
departments spend nearly all of their time slogging their way through this mass 
of detailed data. 
 
The information we need is already in the system somewhere and the problem is 
trying to get it out when we need it. We should there- fore be looking for 
tools to help access the information, rather than trying to change the 
information itself. An advantage of this approach is that it works equally well 
with traditional MRP as with the newer advanced planning systems. 
 
A normal MRP report will show all items/orders to be released, expedited, 
deferred, or cancelled. The planning process has correctly identified all the 
actions needed to meet the requirements. All standard MRP reports and 
inquiries, however, are item oriented. This is so because the entire MRP 
process and logic are item oriented. There's nothing inherently wrong with 
this, but it makes retrieval of all the information relative to a customer 
order, for example, an arduous process. 
 
Now, let's access this MRP information but bring it together according to the 
customer order. Include all inventory, open orders, planned orders, and firm 
planned orders that will support this customer's requirement, down through all 
levels of the bill. Collect this information into a working file and provide 
reports and inquiries that show all the recommended actions for any items or 
orders no matter where they happen to fall within the product structure. I call 
this approach reality-based priority management (RPM). The nice thing about RPM 
software is that it can be written totally outside of the existing ERP system 
and is therefore immune to system upgrades and version concerns unless there is 
a change in the database structure. 
 
This is not hard pegging, in which order identification is imbedded within each 
demand, work order, and planned order. Hard pegging is highly restrictive- it 
prevents flexibility-and is only useful in specialized situations such as 
government contracting where the customer might actually own parts and work in 
process (WIP). Since RPM pegging is accomplished completely outside the ERP 
environment, the hard relationship links exist only for the benefit of the 
reports and screens used to execute the plan. When the plan is regenerated, the 
system has complete discretion to replan according to its own logic and the 
supply-demand equation. Another RPM extraction and calculation readies the work 
file for the next round of execution decisions. 
 
Anticipation 
The basis of the theory of constraints is to identify the constraining 
resource, or bottleneck, and build your plan and control around that 
bottleneck, maximizing overall throughput. The RPM information retrieval 
approach borrows from this idea by focusing on the activities that are most 
critical-the ones most likely to cause a delay. With its customer order 
orientation, it becomes easy to see which activities pose the highest risk to 
on-time completion of the customer order. Managers can use ~ this information 
to pro-actively address these work orders, purchases, or resource issues. It 
also makes it easy to identify which activities directly support customer 
requirements and which are in " I the plan simply to replenish inventory or 
meet safety stock requirements. While replenishment is an important objective, 
it should always take a back seat to satisfying customer demands. 
 
This new approach makes effective use of the data and information that already 
exist within the enterprise system. It doesn't change or affect the existing 
system in any way, and it's not a software modification that might affect 
support costs. It gives managers an execution tool to greatly improve on- time 
shipment performance and maximize the effective use of resources, applying them 
where they can do the most good. "
 
Dave Turbide, CFPIM, CMfgE, CIRM, is an independent market analyst and 
consultant with more than 25 years of experience helping companies select, 
implement, and benefit from information management systems. He is the author of 
six books including Why Systems Fail (Industrial Press, 1996), and was founder 
and chief editor of Midrange ERP magazine. He can be reached via e-/nail at 
Dave@xxxxxxxxxxxxxxxx 

  
Mandis Inc. 
410-526-5996 
Mandis-Inc@xxxxxxx


-------------- Original message from "Morrison, Doug" 
<dmorrison@xxxxxxxxxxxxxx>: -------------- 


> Thanks for your comments so far. Here is some additional information 
> regarding our objectives. 
> 
> The plant we are converting is a machine manufacturing plant. Their 
> bills contain 1000's of components. Currently this plant is on a stand 
> alone system but once we convert them they will be in our normal MAPICS 
> environment which supports several other plants and centralized order 
> entry. 
> 
> The message below describes why they want to continue processing net 
> change MRP during the day in MAPICS. 
> 
> -----Original Message----- 
> From: Benoit, Paul 
> Sent: Thursday, October 06, 2005 10:08 AM 
> To: Morrison, Doug 
> Cc: Help Desk - IT 
> Subject: RE: [MAPICS-L] Net Change MRP 
> 
> Doug, 
> 
> This request is form our machine manufacturing plant. In there current 
> system they use a net change MRP run to evaluate the actions required 
> for a new customer order for a machine. These machines have several 
> levels in the bill of material and thousands of parts. The net change 
> MRP tells them what they have to order. They use that 'shortage' 
> information to: 
> 
> 1. Provide a promise ship date 
> 2. Release purchase orders and manufacturing orders for the items with 
> the longest lead times. This saves one day and can make a difference in 
> the very competitive delivery times required for these machines. 
> 
> Best regards, 
> Paul 
> 
> -----Original Message----- 
> From: Morrison, Doug 
> Sent: Thursday, October 06, 2005 9:40 AM 
> To: Benoit, Paul 
> Cc: Help Desk - IT 
> Subject: FW: [MAPICS-L] Net Change MRP 
> 
> Paul, 
> 
> Can you provide some details as to why we want to run MRP Net Change 
> more than once a day. 
> 
> Doug 
> 
> 
> -----Original Message----- 
> From: mapics-l-bounces@xxxxxxxxxxxx 
> [mailto:mapics-l-bounces@xxxxxxxxxxxx] On Behalf Of Joseph Phelan 
> Sent: Thursday, October 06, 2005 9:34 AM 
> To: MAPICS ERP System Discussion 
> Subject: Re: [MAPICS-L] Net Change MRP 
> 
> Doug, 
> 
> I agree with Dale...you may want to investigate an Advanced Planning and 
> Scheduling (APS) solution. But as was previously mentioned, what 
> business problem are you trying to resolve? 
> 
> 
> -----Original Message----- 
> From: mapics-l-bounces@xxxxxxxxxxxx 
> [mailto:mapics-l-bounces@xxxxxxxxxxxx] On Behalf Of 
> DaleGindlesperger@xxxxxxxxxxx 
> Sent: Thursday, October 06, 2005 9:32 AM 
> To: MAPICS ERP System Discussion 
> Subject: Re: [MAPICS-L] Net Change MRP 
> 
> Doug, do you really need MRP more than once a day? Can I ask you why? 
> 
> You may be a candidate for one of the APS tools... 
> 
> Dale Gindlesperger 
> IT Manager/Special Projects Leader 
> Fleetwood Folding Trailers, Inc. 
> 258 Beacon Street 
> Somerset, PA 15501 
> 
> -----Original Message----- 
> From: 
> Sent: Thursday, October 06, 2005 9:21 AM 
> To: 
> Subject: Net Change MRP 
> 
> We are running MAPICS XAR6 and are in the process of converting one of 
> our companies from another system to our MAPICS system. We are 
> currently running a daily full generation MRP run during our nightly 
> batch process. The facility we now converting to MAPICS wants to be 
> able to run Net Change MRP during the day. In MAPICS you can't run any 
> MRP if order entry is active which will be the case for us. Has anyone 
> developed a like net change process that could be run during the day? 
> Or do you know of any third part packages that would meet this need? As 
> always thanks in advance for your input. 
> 
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