i currently work for a build-to-order manufacturing company that releases manufacturing shop order early in order to keep under utilised work centres business and resources busy, but do not process the whole routing which results large numbers of shop order remaining open in WIP.
This does not seem to me as the right course of action and it negatively effects our internal KPI for manufacturing shops order closed within plan routing time.
Does having large numbers of shop orders unfinished in WIP have any negative effects on the system regarding MRP and scheduling?
regards
Jamie
Best answer by asanka
Generally, having SOs open for a long time is not a wise idea. For better costing, and inventory optimizations, reckon the SOs should be completed as soon as possible. Your accounting department will always appreciate having less value in WIP components. For your environment, you may consider the following options and more:
Using lot sizing rules to have many shop orders with smaller quantities, rather than one big shop order with larger quantity that stays open for a long time
Introduce extra levels in the BOM, so that you can receive partially completed products as semi finished goods and keep it in inventory rather than WIP.
Generally, having SOs open for a long time is not a wise idea. For better costing, and inventory optimizations, reckon the SOs should be completed as soon as possible. Your accounting department will always appreciate having less value in WIP components. For your environment, you may consider the following options and more:
Using lot sizing rules to have many shop orders with smaller quantities, rather than one big shop order with larger quantity that stays open for a long time
Introduce extra levels in the BOM, so that you can receive partially completed products as semi finished goods and keep it in inventory rather than WIP.
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