MRP is used on a daily basis to generate demand-driven jobs and purchase orders.
Jobs and POs are generated through MRP
All jobs and POs are generated by the MRP screen. Jobs are always generated first in multi-level order so that each level generates the demand that drives subsequent levels. POs are always generated last so that purchased items have complete demand profiles.
Run MRP on a daily basis for “just in time” target dates
MRP should be run on a daily basis so that jobs and POs are generated “just in time” to respond in timely fashion to any new demand that materializes within item planning period action windows
MRP generation is a multi-level process
Each MRP run is processed in multi-level order, starting with job generation for custom to order items, followed by job generation for standard sell items, job generation for subassemblies, and ending with PO generation. The jobs that are converted at each level affect the requirements for subsequent levels.
Each MRP session is typically split by a planner and buyer
Each MRP session is typically split by a production planner and a buyer or is handled by one person who performs both roles.
The planner converts planned jobs
The production planner, who maintains item order policies and supply pipelines, M item standard Lead Days and Job Days settings, and top level item Time to Shipment targets, generates planned jobs and converts them into live jobs.
The buyer converts planned POs
The buyer, who maintains P item standard Lead Days settings, supplier line cards, and purchase prices, reviews and converts planned POs into live POs after verifying supplier selection, pricing, and manufacturer part number availability.
MRP consolidates interdependent demand
On paper a product structure is an independent set of multi-level subassemblies and purchased components, but actual demand is typically “interdependent” across multiple product structures. A parent item, subassembly, or purchased component may be needed by several sales orders or jobs at the same time. Whenever possible, MRP combines interdependent demand into a single job or PO. By consolidating interdependent demand into fewer jobs and POs, MRP generates a simpler and more efficient master schedule that is easier to manage and execute.
MRP should be generated daily
Because sales order demand materializes on a daily basis, MRP should be generated daily to initiate jobs and POs as quickly as possible for just in time planning and to avoid introducing late days into the master schedule.
Never bypass MRP with manual POs
MRP generates a coordinated master schedule in which all dates are inter-connected and work centers are prioritized based on meeting required dates. When you interject a manually created job or PO into the master schedule, it has no relationship with other dates and disrupts the schedule by misallocating material and distorting work center priorities.
Proper use of manual POs
This rule does not mean that you never create a manual job or PO line. What it does mean is that all POs related to actual or anticipated demand must always be generated by MRP. If you need to create a PO line for other purposes, you are free to do so.
Each set of POs generated by MRP represents a minimum action profile of the items that must be ordered immediately to meet item required dates. After a PO has been generated by MRP, you may wish to augment the PO manually within the Purchase Orders screen to accommodate special situations. If you wish to fill a truck or container to reduce unit shipping costs, you may wish to increase item quantities or add items that will be needed in the future. If you have a minimum volume level commitment with a supplier, you may wish to increase quantities or add items to meet your volume level.
Never generate partial or fragmented MRP sessions
Each MRP session is designed for complete generation and conversion through all job levels and always finishing with PO generation and conversion. Complete generation is an absolute requirement for achieving a coordinated master schedule. Never skip levels or generate jobs on one day and POs on another.
NOTE: This rule does not mean that two people cannot participate in an MRP session. A production planner, for example, could generate the entire session and convert jobs, but could pause the session after PO generation so that a buyer could convert the planned POs after verifying supplier prices and other details.
Never delay planned job or PO conversion
When MRP generates a planned job or PO, it must be converted immediately in order to avoid introducing late dates into the master schedule. Never delay conversion because this defeats the “just in time” nature of the master schedule.
