E9.2 Eliminating Redundant Demand From MRP

[Jeff George]

I've been experimenting with an issue, and I haven't come up with a solution yet.

My company runs a weekly MRP full regen for products in certain Master Planning Families. The version of Supply & Demand Inclusion Rules for this run are empty, but it includes the forecast type for these finished good families. We'll call this MRP A.

This specific run is followed up by a full regen for everything else outside these MPF, using a fairly standard version of Supply & Demand Inclusion Rules. There is also a nightly Net Change based on this run. We'll call this MRP B.

The issue is that the components from MRP B are showing both Firm Work Order Demand for the items that are part of MRP A as well as Planned Work Order Demand based on the forecasts used in MRP A. There is no consideration that there are already Firm Work Orders for the same time period as the Planned Work Orders from the Forecast. Likewise, if you look at the Time Series for something in MRP A you see both the Firm Work Orders and Planned Work Orders (from the forecast) in the same period.

The result is that the Supply & Demand for the components are overstating Demand because of these forecasts. What is the best way to resolve this issue? I've thought that we need to have MRP A use the same Supply & Demand Inclusion Rules and use Forecast Consumption, but the problem with that is that most of the component demand is being created simply by the forecast and existing work orders, not sales orders.

 

[conbry]

Jeff,

You couldn't use forecast consumption (FC) as FCST can be consumed only by sales order (regular or transfer) or shipped order. Maybe you could create a new supply & demand rule, selecting work orders only, no other orders. If MRP A is run with the new S&D rule, the firmed work order is considered as supply, the quantity of planned order would be less. Thus the components would have a proper demand from MRP A.

Hope this would help. Let me know if it doesn't work for you.

Best
Conbry

 

[Jeff George]

Thanks for the feedback, Conbry. The one thing that I'd like to clarify before creating the new S&D rule: are you saying that those Firm Work Orders for a period would offset the Planned Orders being generated by the Forecast? If so, that's kind of like getting a quasi-forecast consumption result.

 

[conbry]

Jeff,

NP. Yes, it's close to forecast consumption logic. Here is a simplified example
1. Forecast 100 on 05/20
2. Firmed work order 30 on 05/20, frozen

Without the new S&D rule, MRP A would suggest a Planned Order 100 on 05/20. Over-planning occurs.

If the new S&D rule is used, MRP A would suggest a Planned Order 70 on 05/20. No over-planning.

If the firmed work order is not frozen, MRP would defer or expedite the order as needed, and increase the order quantity to 100. The logic is based on the date of 05/20. This is the difference from forecast consumption, which is based on a period. It might not be a problem for your case, if all firmed work order are created from forecast or the business does mind having a few E/D/G messages.

Hope this makes sense. Good luck.

Best
Conbry

 

[Jeff George]

It definitely does make sense, Conbry. I'm going to experiment with your suggest as soon as possible. I may not be able to complete the testing until the week after next (going to a remote facility for a project), but I will let you know how it ends up. Thanks again for the suggestion.

Jeff

 

[Jeff George]

I've finally gotten a chance to test this. I've added the Work Orders to the MPS Supply & Demand Inclusion Rules and processed the MRP for the parent and the child.

The Time Series for the parent shows both a Firm Work Order for quantity 78 and a Forecast for quantity 156 in the period ending 4/29/22. Based on this discussion, that means I should see a Planned Order for 78, driven by the Forecast. When I look at Supply & Demand I do see the Firm Work Order Supply for 78 and a Planned Work Order for the other 78, which is the data I want to trickle down to my components. The components also show only the firm demand and the adjusted forecast planned demand. I think this is a good solution. Thanks, Conbry.

 

[conbry]

Good to know that you like the results.

Best
Conbry