Page 219 - Orlicky's Material Requirements Planning

198 PART 3 Managing with the MRP System

storage device of a computer. BOM processor software packages, mentioned previously,
edit, organize, load, maintain, and retrieve BOM records but do not structure them. These
programs assume that the BOM file is already structured properly to serve the needs of
MRP. This chapter attempts to clarify the subject of BOM structuring and to describe the
basic techniques used to achieve good BOM structure.
When an MRP system is about to be introduced into a manufacturing company or
plant, the existing BOM should be reviewed to ascertain its suitability for purposes of
MRP. The following checklist will aid in spotting any structural deficiencies:
■ The BOM should lend itself to the forecasting of optional product features. This
capability is essential for MRP purposes.
■ The BOM should permit the MPS to be stated in the fewest possible number of
end items. These items will be products or major assemblies, as the case may be,
but in either case, they must be stated in terms of BOM numbers.
■ The BOM should lend itself to the planning of subassembly priorities. Orders for
subassemblies have to be released at the right time with valid due dates, and the
due dates should be kept up to date.
■ The BOM should permit easy order entry; it should be possible to take a customer
order that describes the product either in terms of a model number or as a con-
figuration of optional features and translate it into the language that the MRP sys-
tem understands: BOM numbers.
■ The BOM should be usable for purposes of final assembly scheduling; apart from
MRP, the final assembly scheduling system needs to know specifically which assem-
blies (assembly numbers) are required to build individual units of the end product.
■ The BOM should provide the basis for product costing. Standard costs and vari-
ances are derived from the BOM.
In a given case, when these criteria are applied to the existing BOM, it will often be
found that some, but not all, of these requirements can be satisfied. The BOM may have
to be restructured, and this can be done without affecting the integrity of product speci-
fications. The severity of the problem of BOM structure varies from company to compa-
ny depending on the complexity of the product in question and the nature of business.
The term BOM structuring covers a variety of types of changes made in the BOM and sev-
eral different techniques for effecting such changes. The subject of BOM structure, as
reviewed in this chapter, consists of the following:
■ Assignment of item identities
• Elimination of ambiguity
• Levels of manufacture
• Treatment of transient subassemblies
■ Product model designations
■ Modular BOM
• Disentangling product option combinations
• Segregating common from unique parts