The "Big 3" MRP Settings
In our experience, the majority of companies that are struggling with MRP can remedy their problems by focusing on the Big 3 MRP settings: 1). Reasonable Job Days on 100% of their manufactured items 2). Reasonable lead days on 100% of their purchased items, and 3). A clear cut order policy decision of Demand Driven or To Order based lead day contribution. If the Big 3 settings are not done, you must make an immediate commitment to get these settings done completely as the highest priority. Once the Big 3 are in place the entire system will fall in line for your entire company.
Maintain a Job Days allocation and Run Size against all M items
A Job Days allocation, along with a Run Size that represents a typical large-size job quantity, must be maintained against all your M (manufactured) items. The Job Days is the number of shop days allocated by MRP for manufacturing the item. For guidance on making this allocation, you can use the Job Days Inquiry, which provides a Calculated Job Days amount derived from current routing and work center settings.
Maintain a Lead Days allocation against all P items
A Lead Days allocation must be maintained against all your P (purchased) items. The Lead Days is the number of calendar days allocated by MRP for procuring the item. Make sure sufficient days are allocated to cover the entire procurement process, including potential variations in supplier delivery time and receipt processing time. Among items assigned to the same default supplier, apply consistent allocations to achieve uniform due dates on multi-line POs.
Use item Order Policies to plan a strategic inventory
“Strategic inventory” is a plan for reducing times to shipment using the least amount of inventory to do so. Strategic inventory is achieved by applying a Demand Driven order policy against any item you wish to have on hand to meet a high probability of your demand scenarios, accompanied by a Monthly Potential Demand value and Supply Days target.
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