Page 238 - Orlicky's Material Requirements Planning

CHAPTER 11 Product Definition 217

These parts therefore are put into an imaginary bag, as it were, and a part number is
assigned to identify this bag or kit. A (pseudo) BOM is established for the kit, which is
then treated as an assembly for purposes of master scheduling and MRP.
The principle involved here is the same as in the case of the S-bill, that is, assigning
a single new identity code to individually coded items that constitute a logical group and
employing the format of a BOM to relate such items to one another. K-numbers may be
used to advantage within a modular BOM (e.g., to streamline material requisitioning), or
they may be used even when there is no need for a modular BOM. The K-number is
another nonengineering part number. These artificial identity codes have little to do with
the design of the product and are not part of product specifications but are created for
more convenient forecasting, planning, and master scheduling.
These newly created BOMs, along with the M-bills discussed earlier, represent a
superstructure in the BOM file that, once established, then must be maintained along
with the rest of this file. This is a new function that increases the cost of file maintenance.

INTERFACE TO ORDER ENTRY

Procedures governing customer order entry and backlog management, called order entry
for short, are outside the boundaries of the MRP system except in cases where customer
orders or contracts constitute the MPS itself or where such orders are substituted for
items originally planned via this schedule. Otherwise, order entry interfaces with the
MRP system through the final assembly scheduling system. The latter then calls on the
MRP system for components and, where implemented properly, checks the availability of
these components by accessing the respective inventory records during the course of the
final assembly scheduling process.
To make this feasible, however, and to be able to back up the final assembly sched-
ule with part numbers (BOM numbers) of the highest-level component items required for
each specific unit of product being scheduled, it is first necessary to translate customer or
warehouse orders into manufacturing language, that is, BOM numbers.
With most products of some complexity (assembled products), customers—and
sales personnel—normally specify orders in descriptive English, in terms of model num-
bers, or by means of a so-called generic code that serves as shorthand for an English
description. An example of a generic or product-description code is shown in Table 11-1.
The generic code is convenient to use in a marketing environment, and it has the
additional advantage of not being subject to variation between models or to engineering
changes. Power steering remains power steering, but the respective BOMs will vary
between models, and their identity coding, as well as contents, will tend to change over
a period of time. For purposes of manufacturing and costing, the generic code must be
translated into a specific code, that is, into BOM and part-number terms.
In a modular BOM situation, each generic code would have one or more S-number
counterparts, and the generic-to-specific conversion could be effected either by means of
decision tables or through inverted BOMs (another instance of pseudo-BOMs), as illus-
trated in Figure 11-11.