Page 336 - Orlicky's Material Requirements Planning

C HAP TE R 19

Repetitive Manufacturing

Application

Unlike the traditional process of a master schedule netting gross to net requirements
through to a detailed material plan, the repetitive manufacturer needs to perform rate-
based material planning supported by rate-based parts delivery schedules. In some com-
panies, this rate-based schedule must be tied to a mixed-model-sequenced line for items
going to finished goods or may require traceability to a customer order. Processing indi-
vidual work orders either by the practitioner or under the software covers by the com-
puter does not add value. Rather than detailed job-order costing, the variance in expect-
ed versus actual output rates over time is a key performance measure. A key measure is
linearity, which expects that each day has a consistent output. Some companies will mea-
sure each hour of output. This linearity of output provides key insight into the overall
effectiveness of the process. Product costing changes to a four-wall-period approach
rather than performing detailed issue transactions to a work order. This process control
approach is quite similar to the process industry, as discussed in Chapter 18.

GENERAL REPETITIVE APPLICATION

A repetitive manufacturer makes high-volume products in low variety. Most commonly,
this type of manufacturer competes in the market based on price and/or lead-time
response. The manufacturing strategy used to meet the market is usually make to stock,
configure to order, or assemble to order. The ability to promise delivery to the customer
accurately is very important for the repetitive manufacturer. Less important is the ability
to track costs to a specific production unit. Costs are considered over a period of time
rather than for a particular unit, similar to process industry. Bills of material (BOMs) have
relatively few levels, and routings are fixed and reliable. This is a very different environ-
ment from the traditional discrete job shop for which material requirements planning
(MRP) was developed. Discrete job shops have a wide variety of potential routings,

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