MRP Tool: Material Replacement Planning for production.
Developed in English. It is easier to understand the initials by reading backwards. From right to left. It is highly qualified abroad.
These systems known and applied in many production companies can be computerized or not.
In other words, they can be used with computers or with handwritten files.
We start from the need for implementation to achieve continuous production.
For the production of a company, it must be supplied with:
1. Fixed assets. We assume that they are ready for production.
2. Inventories. (They are the ones that must be replaced).
- Raw material. Element with which one begins to do good. Inputs. Elements that are added to the good in the process and remain in it. Auxiliary. Elements that are added to the good in the process but that do not remain in it. Components of fixed assets.
The importance of application development is given in increasing order. Unfortunately it applies to the reverse.
Unfortunately, in addition to the limited use in Argentine companies. The application is in the opposite direction.
Planning in Argentine companies is not a recurring thing, I mentioned it when dealing with warehouses.
After the introduction I mention some points to keep in mind why I express the above.
Introduction and terms used
When speaking of planning, each and every one of the components must be perfectly ordered and identified in order to control them. This is accomplished with what would be called the element code.
Item code
All the actions of the component must be registered online to this code. In my opinion, fixed assets should be included. As is the identity document number.
It is used to achieve an order independent of each other in a list of many similar elements.
The intention is not to give a definition of the code word, but an explanation of the benefits of its application so that it is the user himself who can establish order in his goods with his criteria.
We can safely say that the code appears in all the orders of our lives. Unless you are just an undocumented person to start with, we see codes everywhere, it just happens that you just have to understand them.
Codes can be numeric, alphanumeric, or alphabetical. In other words, you can search in an orderly way using numbers, letters or a combination of both.
The distinctive feature is that everyone must have reserved the same number of characters, whether they occupy it or not, but they must all be, for example, 10 or 40 characters, depending on the user's requirements.
The question is to identify and thus order. Be it a truck, a screw the truck uses, or an account where the sale of the truck or whatever is being sold is recorded. Everything is coded and registered with your code.
Item tab
Once defined how each element will be coded, you must define your registration form or "record".
All the cards must be together ordered by the code.
Each tab will contain what the user wants to have registered in it.
Of course the code and the name, plus a series of data (better said places to load the data) that inform and enable its control and management.
Management Data
Since the elements of supply to production must be replaced when their need is detected. Entry, exit and balance data should be recorded such as an accounting account that generally only mentions amounts that allow proper management. Provisioning data should be in plain view so that it can be immediately replenished at the time of movement.
Ideally, at the time of registering the movement itself, the balance is controlled with the data called the order point and if it is less than this, its replacement should be managed.
The way of asking (the provisioning) is something worthy of deep study. Hence the expression ideally.
Provisioning
There are various work schemes or types of provisioning. In some study texts more or less complicated names are read, with this that I will present it is possible to understand perfectly the working scheme. The main ones used are:
Provision by and for consumption
Terms used
1. Not planned to ask.
It has no data loaded in the file.
2. Normal order
They are used for normal production.
to. Upon request.
It is very similar in character and is mistaken for "unplanned." This scheme is planned to order only when the user requires it, without it becoming a special request.
b. Permanent.
The characteristic of always asking for the same at the right time defines your name. It is used for items of sporadic and irregular consumption.
c. Variable
The characteristic that you can order different quantities in each management gives it its name. It is used for elements of regular and continuous consumption period by period.
3. Special Order.
It seems to indicate that it is very sporadic, wrongly used for cases of unplanned orders or orders for the first and only time.
It should be understood that this can be used recursively for any material that will be used for a "scheduled" task (in advance) outside of standard normal production. In other words, it depends on the need for a “scheduled” task, planned with due anticipation.
Excuse the Insistence, it is because I think they do not understand this part, at least where I work.
For this point the title is that I define by and “for” consumption (it does not appear like this in the study texts).
Normal order is "for" consumption based on a given planning and calculations made in general for each and every one of the elements when executing the purchasing forecast to which the others will be added to execute a timely management.
Special order is "for" consumption and adds the concept of reservation to the list of terms.
The form, the moment, the quantity to order, we have already said it is added in the tab declared with different names.
From these names we can rescue some to explain in detail and thus achieve a perfect understanding of the way the system works.
1. Time.
Provisioning takes time, which is extremely important to consider by calculations.
It is called replenishment time or Lead Time (in English). At the time between the moment the need is detected and the material is replaced in its storage or deposit.
The measurement of this time must be given in an integral way, separating point by point from the customer supplier.
Its composed of:
to. Review time is what separates one needs control from the next.
b. Order time is used for the preparation of the order and delivery to the supplier.
c. Response time. In case of a purchase it is a quote from the supplier.
d. Analysis and preparation time. To control the different offers and choose who to award.
and. Authorization time and signatures of the respective managers.
F. Payment time. It is only considered if it is prepayment management.
Only now is it ready for confirmation of internal management.
g. Delivery time. It is time of the provider generally agreed (along with the payment method) a separate record must be kept on one side of the item and on the other side of the provider.
h. Transportation time. To put it in its place
End of time calculation. The times given in this list must have a separate record, it is essential to achieve efficiency in the sectors with the aim of managing everything in the shortest possible time.
2. Quantities
to. Quantity in stock (STOCK).
It is what appears in the accounting, which is in deposits. Includes the minimum quantity, the criticism, the reserved one.
b. Minimum quantity (STmi)
Also called safety stock (STs). Defined as a minimum limit that puts the continuity of production at risk.
In principle it is only a mention that the existing amount in deposits dropped to a defined value.
It can be defined in quantities or in months of consumption. There are usage tables and calculation methods but basically you have to have it defined from the beginning. Then experience shows that it is actually what is intended. That is to say that by all means it is intended to have the minimum of capital immobilized in deposits and this scheme seems to be optimal.
c. Critical Quantity (STc)
In principle it would be the same or less than the minimum quantity, except that it is defined exceptionally, only, for some materials whose lack produces a serious deterioration in production and forces the system to issue alert messages if this existence value is reached by said material.
d. Reserved quantity. (STr).
It is so for some special production request.
and. Amount under management. CP or CC (quantity ordered or quantity purchased)
It is what is being bought or produced. Management can be by normal (fixed / variable) or special provisioning. The latter gives the amount in reserved management and considered as such when received in deposits.
F. Total quantity (ST) or Available quantity (STd)
It is the addition / subtraction that is reported (as applicable) of the amounts indicated above for the purpose of adequate supply.
to. The minimum quantity (or security) and / or the critical quantity are subtracted from the quantity in stock to achieve a correct supply. In other words, if everything was consumed, it remained at zero and the minimum quantity is 2. -2 (minus two) will be reported.
b. The reserved quantity is not considered in normal management, the quantity in management is added only if it was carried out by normal supply from the same system. If it is under special management, reserve is not considered either.
g. Maximum quantity (STmx)
It is also just a mention used in some provisioning schemes that consider it appropriate. It is the maximum amount of stocks allowed for various reasons, such as being cheap (the busiest) or located in warehouses (there is no place for more).
It is used in normal provisioning calculations.
h. Quantity to replace or quantity to buy (Ca)
It is in principle what should be indicated to the production / supply management. Strictly calculated or defined by the system. The process is called a purchasing forecast. It is something like calculating the average consumption (CPM) to prevent future needs. It is the amount calculated periodically (generally month by month) by the system to be able to carry out the adequate provisioning. It is only used for variable normal order / consumption.
It is a very crucial point and I consider it necessary for further explanation that will be given in another treatise.
It happens that in some schemes it is limited by the following amount or for economic reasons.
i. Optimum quantity or optimal batch (LO)
It is defined to the system by algorithms that depend on many aspects. Such as storage capacity, amount of use (pairs), etc. If the quantity to be replenished is greater than the optimal quantity or optimal batch, the management will be divided.
j. Order point (PP).
It is calculated in each process for the order / variable normal consumption. It is not busy for special order. If for fixed normal order although it is not a calculated value but it is defined (fixed).
k. Quantities calculated / reported. The majority…
It happens that in the Argentine organizations for the unplanned supply cases (and the others as well) with all the power that the organization grants, they ask for what the respective managers of the productive areas indicate, except for few restrictions.
For the baked goods. The amount to buy with all the power that the organization gives you is defined by the subtraction of the amount of money that the organization is willing to invest after purchasing the unplanned provisioning elements mentioned above.
Notes and Observations
It should be understood that having an element with data loaded the management defines its application based on statistical calculation algorithms. In other words, they must use the data they contain but the form calculations in the case of fixed and special normal provisioning are reduced to a minimum.
It happens that these systems are comprehensive, that is, they are armed with application packages for each of the different areas of a productive company.
It happens that the system provider sells the package so that the buyer leaves the use of the package in the hands of employees who, of course, they fully trust.
But…, if the implementation, that is, the burden of the data necessary to carry out this or that task, is also left to the employees, some undesirable situations happen for the business that not only is it possible to hide by the fact alone. of the trust itself mentioned above.
These applications are in fact being applied in response to customer needs. But…, if the developer analyst who intends to implement a system in a company, deals with an employee who is afraid of losing an iota of his position, this employee is not going to give up the necessary logical information that he knows is keeping him in his position at the position you are in. So much so that for the developer analyst, the implementation could be a waste, at least, of time or an impossible mission. And, if both are employed and have limited time with limited budgets, the one who is most alive wins, and we are full of that in Argentina.
Many companies truly deal with these computerized planning schemes inclusive. Only only for "accounting" administrative tasks, not necessarily productive.
They do not interpret the built-in package that can be applied the same in every operation that is performed. I see that they only apply to accounting, purchasing and warehouse operations. In other words, they waste a potential tool for which they paid, which is the use of the same scheme to plan production. It is in the package but in vain. There are cases in which global development and application systems such as SAP (whose implementation to a large company could cost close to 10 (ten) million dollars between hardware, software and training.It stops applying the MRP scheme for production because "it is possible" to demonstrate that it is not capable of performing the task that it does with "paper and pencil", a julanito that is generally a suitable non-professional who intelligently appeals to hinder the implementation of improvements to the company community and by extension of the entire community to objectively achieve to improve only him, or at least remain comfortable in his position without fear of being overcome.
But hey this is Argentina, it happens in reality and it will continue to happen as long as the companies remain disorganized no matter how big they create or seem.
If they do not carry professionals in key positions, the situation will not change.
That is to say. MRP, studied and developed by specialists for specific use in industrial production enriched by its possibility of supplying inputs and production aids, is used (in Argentina) to its minimum degree of application.
Even the names of the various recognized computer applications clarify this. Called:
SIFAB: Manufacturing systems. SAP: Production solutions.
Another issue to keep in mind is that with these integrated systems the possibility of working in black or trout decreases. In other words, if an entrepreneur decides to fully control the production of his factories, it is best to implement MRP-type solutions. If you have to make 4 tires, this system approves and replaces what is necessary to make 4 tires, nothing else, lest 2 cars appear with all their new tires from the same series without anyone knowing who made them or who made them. he got into the "black" market.
There are serious drawbacks to planning applications in Argentina, but it would be necessary to investigate what is the real reason for applying the excuse that is applied in order to prevent the use of such systems paid by the owner and that must be approved to use an employee.
But hey, that's how we are.
It is now important to achieve simplification of the understanding of the system. This is my contribution or a grain of sand. Then we will continue with the heavy calculations.
