Steven Chinsky, Columbus MF16 - HOW TO LOOK LIKE AN MPS GURU

2 #NAVUGFocus YOUR PRESENTER Steven Chinsky Sr. Industry Solution Architect, Columbus Dynamics Credentialed, 18yrs NAV

3 #NAVUGFocus Central Concepts of the Planning System. Balancing Demand and Supply. Handling Reordering Policies. Planning Parameters Gather tips and lessons learned from others who are running MRP and MPS. Learn what else can we do to further advanced forecasting and planning. Go back to your office and show them what you’ve learned. SESSION OBJECTIVES

4 #NAVUGFocus What do you want to learn? How about a test? NOW IT’S YOUR TURN

5 #NAVUGFocus MRP? VOCABULARY

6 #NAVUGFocus MRP? MPS? VOCABULARY

7 #NAVUGFocus MRP? MPS? Dampener Period? VOCABULARY

8 #NAVUGFocus MRP? MPS? Dampener Period? Replenishment System? VOCABULARY

9 #NAVUGFocus MRP? MPS? Dampener Period? Replenishment System? Lot Size? VOCABULARY

10 #NAVUGFocus MRP? MPS? Dampener Period? Replenishment System? Lot Size? Order Multiple? VOCABULARY

11 #NAVUGFocus MRP? MPS? Dampener Period? Replenishment System? Lot Size? Order Multiple? Order Tracking Policy? VOCABULARY

CENTRAL CONCEPTS OF THE PLANNING SYSTEM

13 #NAVUGFocus Base - You typically set up a base calendar on a general level and define each date as either a working or nonworking day. For example, a base calendar for a particular country/region would define weekends and national holidays as nonworking days. All other days would be working days. The program uses the working and nonworking day information that you register on the base calendar and also on any customized calendar when it calculates delivery and receipt dates on sales order, purchase order, transfer order and production order lines.customized calendar when it calculates delivery and receipt dates on sales order, purchase order, transfer order and production order lines. Shop - You can set up many different shop calendars and then assign a shop calendar to every work center. Defines normal workdays, for example, Monday to Friday or Monday to Saturday. You must enter the starting time and ending time of the day. You can define more than one period per day. Defines days that are not normal working days according to a shop calendar. You can define planned absences, such as company holidays. If the absences only amount to part of the planned working time (such as half holidays), then you enter the appropriate timespan by entering the starting and finishing times. CALENDAR DIFFERENCE

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16 #NAVUGFocus Planning Parameters Planning Starting Date Dynamic Order Tracking (Pegging) CONCEPTS

17 #NAVUGFocus DYNAMIC ORDER TRACKING VS PLANNING SYSTEM

18 #NAVUGFocus DYNAMIC ORDER TRACKING VS PLANNING SYSTEM

19 #NAVUGFocus ORDER TRACKING POLICY

20 #NAVUGFocus ORDER TRACKING POLICY

21 #NAVUGFocus ORDER TRACKING POLICY

22 #NAVUGFocus SEQUENCE AND PRIORITY PLANNING

23 #NAVUGFocus SEQUENCE AND PRIORITY PLANNING

24 #NAVUGFocus PRODUCTION FORECASTS AND BLANKET ORDERS

25 #NAVUGFocus Planning Assignment Calculate Regenerative Plan Calculate Net Change Plan Item Dimensions Item Attributes Order-to-Order Links CONCEPTS - CONTINUED

26 #NAVUGFocus RESERVATIONS

27 #NAVUGFocus WARNINGS

28 #NAVUGFocus ERROR LOGS

29 #NAVUGFocus Order Planning CONCEPTS - CONTINUED

BALANCING DEMAND AND SUPPLY

31 #NAVUGFocus Any demand will be met by sufficient supply Any supply serves a purpose DEMAND AND SUPPLY

32 #NAVUGFocus DEMAND AND SUPPLY

33 #NAVUGFocus Dealing with Orders before the Planning Starting Date Loading Inventory Profiles Item Dimensions are Separated Serial/Lot Numbers are Loaded by Specification Level Order-to-Order Links are Never Broken Component Need is Loaded According to Production Order Changes Safety Stock May be Consumed Forecast Demand is Reduced by Sales Orders Blanket Order Demand is Reduced by Sales Orders DEMAND AND SUPPLY

34 #NAVUGFocus Prioritizing Orders DEMAND AND SUPPLY Demand SideSupply SideState of Demand and Supply Already ShippedAlready in Inventory : PF=NPartly Handled : PF=N Purchase Order ReturnSales Return Order: PF=NAlready in process in Whse : PF=N Sales OrderInbound Transfer OrderReleased – All Order Types : PF=U Service OrderProduction OrderFirm Planned Prod. Order : PF=U Component NeedPurchase OrderPlanned/Open – All Order Types : PF=U Outbound Transfer Order Blanket Order / Forecast

35 #NAVUGFocus Balancing Demand and Supply No demand or supply exists for the item => the planning has finished (or should not start) Demand exists but there is no supply => supply should be suggested Supply exists but there is no demand for it => supply should be canceled Both demand and supply exist => questions should be asked and answered before the system can ensure that demand will be met and supply is sufficient DEMAND AND SUPPLY

36 #NAVUGFocus Rules Concerning Actions for Supply Events All supply has a planning flexibility that is limited by the conditions of each of the suggested actions Reschedule Out Reschedule In Increase Quantity Decrease Quantity Cancel New DEMAND AND SUPPLY

37 #NAVUGFocus Determining the Supply Quantity Planning parameters defined by the user control the suggested quantity of each supply order Suggested Quantity may be modified in this sequence: Down to the maximum order quantity (in any) Up to the maximum order quantity Up to meet the nearest order multiple DEMAND AND SUPPLY

38 #NAVUGFocus Order Tracking Links during Planning The planning system must be able to justify its suggestions; that all the demand has been covered, and that no supply orders are superfluous Dynamically created order tracking links need to be rebalanced regularly DEMAND AND SUPPLY

39 #NAVUGFocus Closing Demand and Supply The required quantity and date of the demand events have been met and the planning for them can be closed. Supply event is still open and maybe able to cover the next demand The supply order cannot be revised to cover all of the demand. Demand event is still open with some uncovered quantity that may be covered by the next supply event All of the demand has been covered; there is no subsequent demand (or there has been no demand at all). Any surplus supply may be decreased or canceled. DEMAND AND SUPPLY

40 #NAVUGFocus Creating the Planning Line (Suggested Action) New, Change Quantity, Reschedule, Reschedule and Change Quantity, or Cancel Perform the least demanding maintenance level Create only the planning line with the current due date and quantity but without the routing and components Include routing: the planned routing is laid out including calculation of starting and ending dates and times Include BOM explosion DEMAND AND SUPPLY

HANDLING REORDERING POLICIES

42 #NAVUGFocus Fixed Reorder Qty. Maximum Qty. Order Lot-for-Lot HANDLING REORDERING POLICIES

43 #NAVUGFocus Role of Reorder Point Monitoring the Projected Inventory Level and the Reorder Point Projected Inventory Projected Available Inventory Time Buckets Determining the Projected Inventory Level HANDLING REORDERING POLICIES

44 #NAVUGFocus 1. Supply Sa of 4 (fixed) closes Demand Da of CloseDemand: Create a decrease reminder of -3 (not shown) 3. Supply Sa is closed with a surplus of 1 (no more demand exists). This increases the projected inventory level to +4, while the projected available inventory becomes The next supply Sb of 2 (another order) has already been placed on the timeline 5. System checks if there is any decrease reminder preceding Sb (there is not, so no action is taken) 6. System closes supply Sb (no more demand exists) – either A: by reducing it to 0 (cancel) or B: by leaving as is. This increases the projected inventory level (A: +0 => +4 or B: +2 => System makes a final check: Is there any decrease reminder? Yes, there is one on the date of Da 8. System add the decrease reminder of -3 reminder to the projected inventory level, either A: => 1 or B: => In the case of A, the system creates a forward-scheduled order starting on the date Da. In the case of B, the reorder point is not crossed and no new order is created DETERMINING THE PROJECTED INVENTORY LEVEL

45 #NAVUGFocus 1. Initially, the inventory is above the reorder point. The system checks projected inventory and accumulates demand within the reorder cycle. The system detects that the reorder point has been passed 2. A new forward-scheduled supply is created 3. Next time the planning is run, a new demand has arrived. Although it seems that demand would displace the time when the reorder point is passed, it has no influence on planning ROLE OF REORDER CYCLE

46 #NAVUGFocus Calculated per Time Bucket Creates only Necessary Supply Combines with Order Modifiers Should NOT be Used with Forecast Must NOT be Used with Reservations FIXED REORDER QTY.

47 #NAVUGFocus Maximum Qty. Calculated per Time Bucket Combines with Order Modifiers Order Lot-for-Lot CALCULATING THE OVERFLOW LEVEL

PLANNING PARAMETERS

49 #NAVUGFocus PLANNING PARAMETERS PurposeParameter Define if the item is to be plannedReordering Policy = Blank Define when to reorder Reorder Point Safety Lead Time

50 #NAVUGFocus PLANNING PARAMETERS PurposeParameter Define how much to reorderSafety Stock Quantity Reordering Policy: Fixed Order Qty. plus Reorder Quantity Maximum Qty. plus Maximum Inventory Order

51 #NAVUGFocus PLANNING PARAMETERS PurposeParameter Optimize when and how much to reorder Rescheduling Period Lot Accumulation Period Dampener Period

52 #NAVUGFocus OPTIMIZE WHEN AND HOW MUCH TO REORDER

53 #NAVUGFocus PLANNING PARAMETERS PurposeParameter Modify the supply ordersMinimum Order Quantity Maximum Order Quantity Order Multiple

54 #NAVUGFocus PLANNING PARAMETERS PurposeParameter Delimit the planned itemManufacturing Policy: Make-to-Stock Make-to-Order

55 #NAVUGFocus DIFFERENCE BETWEEN LEAD TIME AND SAFETY LEAD TIME

REQUISITION/PLANNING WORKSHEET

57 #NAVUGFocus MANUFACTURING SETUP

58 #NAVUGFocus LOW-LEVEL CODE

59 #NAVUGFocus Production Forecast Requisition Worksheet Planning Worksheet LET’S PLAY

I NEED MORE!!! TAKING IT TO THE NEXT LEVEL

61 #NAVUGFocus Forecasting/Procurement Lanham AFP – Smoothie - Production Scheduling Planner One Netronic r2/overview.htmlhttp:// 2009r2/overview.html Preactor ADVANCED FORECAST/PROCUREMENT AND PLANNING

FINAL TAKEAWAYS

63 #NAVUGFocus Goals of Supply Planning Avoid Stockout Reduce Ordering Costs Reduce Inventory Costs Plan Leaner and Without Headaches FINAL TAKEAWAYS

64 #NAVUGFocus Keys to MRP Happiness Smart Setups Data Integrity Understand the Results When the results are not what you expect, fix the setups and/or the data! FINAL TAKEAWAYS

65 #NAVUGFocus Contact information Steven Chinsky, Columbus – THANK YOU

66 #NAVUGFocus  Download the session slides from the NAVUG Focus community at navugfocus.com under the Events tab.  Complete your Session Survey at  Attend the Networking Huddles for IT, Manufacturing, or Finance. Tuesday, 5:15PM located in Schaumburg West.  Have a Great Conference! FINAL REMINDERS