Page 231 - Orlicky's Material Requirements Planning

210 PART 3 Managing with the MRP System

this approach, the add-and-delete components most likely would be maintained under
order points and safety stock. This is highly undesirable because it deprives the user of
some important benefits (discussed in Chapter 13) of an MRP system.

Modularization Technique
The technique of restructuring end-product BOMs into a modular format will be demon-
strated next. For this purpose, the preceding tractor example will be scaled down so that
the solution may be seen clearly. Let us assume that the tractor has only two optional fea-
tures, the transmission and steering, each of which has two choices. The customer can
choose only between stick shift and automatic transmission and between mechanical and
power steering. Figure 11-6 shows the four BOMs.
The first combines stick shift and mechanical steering; the second, stick shift and
power steering; and so on. In the product structure, the end-product (model) numbers, 12-
4010 and so on, are considered to be on level zero. The level 1 components, A13, C41, and
so on, represent assemblies, but their components are omitted from the chart to keep it sim-
ple. To restructure these BOMs into modules, they are broken down, their level 1 compo-
nents are analyzed and compared, and these components then are grouped by use. For
example, it can be seen that the first component item in the first BOM, A13, is common to
all models, and therefore it would be assigned to the “common” group. The next item, C41,
is found in stick-shift/mechanical and stick-shift/power combinations but not in the auto-
matic transmission models. This indicates that C41 is unique to the stick-shift choice. The
item that follows, L40, is used only with mechanical steering. The remaining component
items are similarly examined and assigned to groups. The result is shown in Figure 11-7.

FIGURE 11-6 Stick Shift Stick Shift Automatic Automatic
Mechanical Power Mechanical Power
BOMs for four Steering Steering Steering Steering
tractor models.
12-4010 12-4020 12-4030 12-4040

A13 A13 A13 A13
C41 C41 D12 D12

L40 Z75 L40 Z75

B88 B62 B88 B62

F28 F28 F28 F28

E10 G53 E10 G53
D14 H23 J39 N44