Page 132 - Orlicky's Material Requirements Planning

CHAPTER 6 The Material Requirements Planning System 111

Common Usage of Components

Common usage of a component item by several parent items is another complicating fac-
tor in the computation of requirements by an MRP system. In the examples used thus far,
all the component items had a single parent, that is, a single source of demand. In the real
situation, many components will be found to have multiple parents. The lower the level
of the component item, the more parent items it tends to have. In our example, forging
blank D is used to make gear C. But the same blank might very well be used for the man-
ufacture of half a dozen different gears. The lower-level steel, from which this forging is
made, almost certainly would be used for a large num ber of different parts made from
that particular grade and diameter of steel bar. This also would make this part a possible
candidate for a strategic buffer to compress the overall manufacturing lead time. See
Chapter 23 for the discussion of strategic buffers and actively synchronized replenish-
ment lead time (ASRLT).
In order to determine the net requirements for such a common-usage item correct-
ly, its gross requirements stemming from all its parent items for which there are planned
orders must be determined first. (Note: The mere existence of a parent item is not tanta-
mount to a gross requirement.) In addition to dependent demand generated by its parent
items, a compo nent also may be subject to independent demand if it is used as a service
part. Such demands, if any, also must be added to the gross requirements for the item in
question. The gross-requirements schedule of an inventory item represents a summary of
demands originating from one or more sources and applicable to various points in time.
This is illustrated in Figure 6-9.
The level-by-level (rather than lot-by-lot) approach to the computation of require-
ments under an MRP system minimizes the problem of multiple parent demands. All the
parents of a given component item tend to be on the same, next-higher level. Because that
entire level (i.e., all the items on that level) is processed first, all the parent planned orders

FIGURE 6-9 Assembly Assembly
X Y
Gross
requirements
originating from
A Components B A Components C
multiple sources.
Planned-Order Releases Planned-Order Releases
Item X Item Y
Period Period Service Part Order
Item: A
123 4 5 6 7 8 123 4 5 6 7 8
Quantity: 12
20 10 15 15 Delivery: Period 7

20 25 15 12
Gross Requirements
for Item A