Plan Alternate Component in MRP

@Björn Hultgren Ah, there is a column in Alternate Component, you have to change it to “Include During MRP”.

Wonderful, appreciated.

The Alternate Component will only be used when you don’t have enough on hand quantity of the original part.  Checking the Include Alternate Component Part will not just use the Alternate Component if you have on hand and available quantity of the original part.

@Jane Perry  I like your comment. thank you.

@Jane Perry: Is this the only possible order of priority (available qty of the original part considered first) when running the discrete mfg scenario with Shop Order? I have seen comments on Repetitive with Production Schedule that Alternative Components could be considered automatically which might be reflected in the MRP logic as well. 
I’m really interested in the prioritization logic of the MRP for Shop Orders and Shop Order Requisitions and if it’s possible to prioritize the valid available alternates components before using the inventory on hand of the original part (or getting proposals to procure the original part).

Hi,

In MRP, the logic works as Jane describes it, so for the primary component, MRP engine checks:

• Does available inventory onhand cover the gross requirement?
• If no or “to some extent” then check if there are any open supply order for the primary component that can be applied in the netting logic
• If open supply does not cover the temporary net requirement check if alternate component can be used in the netting logic
• If there is excess onhand for the alternate component then plan for it :-) Net requirement will be reduced.
• If there is still a net requirement at this stage, do the lot sizing and create SO/PO Requisitions (for the primary component of course).

I should mention that MRP figures out in which order it should perform the netting. As a general rule the alternate component(s) are processed prior the primary component.

And yes Production Schedules differ from Shop Order and MRP in this area. Production Schedules was kind of designed for “use up” of alternate component prior the primary component. So yes… a little bit inconsistency here.

Cheers

-Mats at IFS RnD

Hi Mats,


Is there any way to change the MRP logic described above to push the usage of Altenate Components while there is availbaility of them? 

Let me briefly explain the “conflict”:

We frequently change parts for other parts, a replacement part,... normaly to introduce a new component and phase out an old component. A revision change, a product improvement, a better cost, etc.

When doing these changes, on a product structure, we increase the revision (with the new component included in the BoM),... but we would like always to consume all inventory of the old component, so that we do not leave "obsolete components in stock" ... with no future demands.

We are currently defining the Alternate Components with MRP Netting functionality (Include in MRP), but the MRP logic plays a trick as follows: 

The MRP calculation will reduce the need for the new part, taking into account the Qty on Hand of the part we want to phase out. Good. 

The MRP calculation will not take into account Pending Supply from the part we are phasing out (with still some pending POs that are on the way). Not so good. More on this here :

Eventualy, we will receive some new parts to stock, and then the MRP plays the following trick: will suggest using the primary part just received (as there is Qty on hand available), then will calculate to use the Alternate Part (when the projected qty of the primary is negative again)…. So each time we receive a batch of primery parts, it will shift to the primary and go back to the alternate soon after. until all alternates are consumed and only new parts.

So it makes a Alternate - Primary - Alternate - Primary…. 

“Production Schedules was kind of designed for “use up” of alternate component prior the primary component.” → can we have this same behaviour in MRP and Shop Orders?

Additionaly, the MRP will do the calculations, but the SOR and SO Materials need to be changed by hand.... Is there a more effective way where the SO Materials are auto-changed to the Alternate Component while stock available exists?

Thanks for your support in advance,

Cheers!

Hi Ikerrari,

From your scenario above, I don’t think using Alternate Parts is the right thing to do. Once you Phase In a new revision with new parts, MRP will plan to this immediately, and with SOH of the new part MRP will ignore the residual SOH which is now your Alternate Part.

I would be using the Phase In/Out date in the Inventory Part for the Product Structure to manage when you want to Phase In the new revision with the new parts. This way you can continue to use up your old parts but MRP can still plan to buy the new ones. Once all SOH of the old part is gone, you can Phase In your new revision and begin using it.

This is how I manage runout of old parts/introduction of new parts when making product changes.

Cheers,

Wade

Hi Wade @ConMan  ,

Thanks for your reply. Yes, I see your point. And this is also being discussed in-house. 

There are cases when this ramp down of “old parts” and ramp up of the new substitue, takes several weeks/months to be completed. During this transition period, production is changed/moved, new demand takes place, … that make the original calculation for the phase-in / phase -out date invalid. And also, during this time we typically need to implement other changes in parallel, other structure updates, that are difficult to implement if the phase-in is in the future (we would have to update the current structure + the future structure that will phase -in). In other words, structures are alive and changing and the supply/demand is also alive and moving in time, making a “future” phase-in date not so practical. 

That is why we are exploring the possibility to implement a logic like… “if there is an Alternate Component with Include MRP Netting flag, use this one first”. 

I can see that this logic we want to implement is already used in “Production Schedules” … but we are not using this at the moment. That is why I was rising the question to @majose … maybe there is a way to get this configured in in MRP and Shop Orders

Thanks for your reply Wade!

Hi Ikerrari,

I manage the Phase In/Out of all our product changes, and what I choose to do is review changing demands on a weekly basis and move the Phase In/Out dates accordingly to ensure a smooth transition and runout of old parts.

However, if you are in an environment where multiple changes occur regularly and inevitably overlap, this would make managing changes via Phase In/Out dates virtually impossible.

Perhaps an idea would be to add your new parts as alternates to the old parts prior to uprevving the structure and making the change permanent. This way, MRP can plan for your new parts whilst the SOH of your old parts is depleted. Then, when you finally runout the old part, simply up-rev to begin  using the new part which should already be in stock based on MRP demand?

Cheers,

Wade

Hi Wade @ConMan 

Great! Thank for your reply and support. 

We did a small audit last week. In the first 6 months of 2022, we have launched 101 changes, affecting 301 structures … 29 of those 101 changes were component substitutions, where we would have a transition period of ramping down the old component and ramping up the new component. This transition period is typically 2 to 6 months, depending on stock levels, purchase orders pending, production, etc.  In some cases, we are making a substituion of more than one component, with different stock levels and therefore different cut points …

So this is the level of complexity that makes us wonder whether there is a better way to make IFS work for us and suggest the use of older components automaticaly until complete usage of existant inventory before introducing the new ones…

Looking to the idea you suggested … ummm… not sure if it would work. If we put the new components as alternates to the old parts, but we do not include the new parts in the structures … why is the MRP going to plan for new parts? maybe I am not getting your suggestion right.

Thanks again and regards!

Iker A 

Hi Iker,

When adding Alternate Components, you can select “Include During MRP” which I believe will begin planning for your new parts as the SOH of the old part depletes?

Cheers,

Wade

Hi Wade @ConMan

No, it will not. We are using this functionality and works only in the following way:

It will plan usage of the Alternate Component (only if the Alternate Component has Qty On Hand, that is, if you already have it in-house ), when shortage of the main Part = negative projected on hand of main part. 

That is, if tyou have Qty On Hand of main Part and Alternate → it will plan to use the main part (though will take into account the Qty On Hand of the Alternate for future Supply of the main Part, = you will buy less of the main Part).

If you do not have Qty On Hand of the Alternate → it will do nothing, and never ask to buy it

If you fall into shortage of the main Part, and you have Qty On Hand of Alternate Part, it will suggest using it. And will plan to purchase the main Part for future demands (never the Alternate Part).

regards,

Iker A