Inventory Investment vs Customer Service

SYNCHRO MRP AND THE ASSEMBLY LINE
by
Brian Willcox CFPIM CIRM
of
ACTION MRPII

Synchro MRP is the concept of applying the JIT principles of only issuing what is needed when it is needed to an MRP system. If you have an assembly line on which is built a range of products, then synchro MRP can bring you many benefits. To explain this concept I am going to use a vehicle assembly line as the example.

The Problem

On a typical vehicle assembly line in South Africa, a range of different vehicles are assembled, not as a batch of one type and then a batch of another, but a continual flow of mixed colours and configurations. If you try to apply the normal works order concept with a kit of parts for each order it would mean one kit of parts per vehicle. Imagine, they are being built at a rate of one every 2 or 3 minutes. That tells us that another solution is required.

The Background

To drive an assembly plant, a daily sequenced build schedule is required, which satisfies the customer orders.(Final Assembly Schedule). Each differently configured vehicle requires a different work content at each work station so to obtain an overall balanced work load for the operators on the line, the build sequence is important. Two different configurations with a high work content at the same work station would not follow each other down the line , but would have a configuration with a lower work content in between them. This way a mixed product flow is built, giving a more balanced work load.

The purchased parts required by the assembly line are sourced both from local manufacturers, out of town suppliers and from overseas, which means that all parts cannot be supplied on a daily basis. The in-house manufactured parts will probably be built in quantities greater than one days usage or a store container full. Therefore a piece parts store is required to hold the parts until required by the assembly line.
Due to the bulk and high number of different parts, to save further counting and handling, it would make sense to issue parts to the line in the containers they were received or stored in.

As individual kits of parts are not issued for each vehicle, an inventory (floor stock) balance is required on the line for the parts used there. This provides the means to control the stock on the assembly line and allows back flushing to be used to automatically reduce the floor stock balance when a part is used and the vehicle has passed a check point.

Synchro-MRP Logic

Synchro-MRP is used to organise the material flow from the store to the assembly line to meet the daily build schedule. The sequenced daily build schedule is exploded one vehicle at a time and allocations are created for each piece part against the applicable floor stock location. The dates on the allocations are adjusted by the component lead time off-set held in the product structure record. This co-ordinates the issue of material in line with the time it is actually required to be used. For example it is ridiculous to issue items to the final assembly stage at the same time as issuing the pressed parts to the body shop for welding together, as these activities take place several days apart but are on the same assembly bill of material.

The creation of the floor stock allocation is used to perform a netting calculation to establish if a transfer of stock is required. When the floor stock projected available balance goes negative, a receipt of stock from the part store is planned. This increases the floor stock projected available balance and creates an allocation on the parts store. The result is the creation of a planned transfer of stock and the parts store projected available balance is reduced. The planned transfer is written to a file for printing in the sequence of creation. Each of the vehicles in the daily build schedule are exploded in turn.

Issue Documentation

Each day the issue documentation is printed from the file for the parts due to be picked that day. The parts are picked and delivered to the line as one total quantity for a part, in the sequence the print file was established from the vehicle explosions. The processing of the transfer documentation reduces the stock balance and the allocations of the parts store and increases the floor stock balance at the floor stock location.
The floor stock balance and allocations are reduced by back flushing, triggered by the recording of the partially assembled vehicle passing a reporting point. The method used to record the movement can be by entering the data through a terminal, by swiping a bar code or what ever method is chosen by the user. The method is not the important issue, the fact it is recorded is what matters. When you have a massive and complex material input problem you need this type of control.

The issue documentation can also be used as Kanban tickets for suppliers who deliver several times each day. The ticket is the authorisation for them to make a delivery and states the line location to which the delivery is to be made. This system then co-ordinates the flow of material from the suppliers to match the build programme.

The Benefits

If you are into assembly lines this approach is well worth considering. Most of the system requirements should be standard features of a modern MRPII package and those not are not that complex to add.

Think of co-ordinating the material flow, simplifying the material issue procedure, issuing by store container, and controlling and reducing the WIP level. All the good things we need to aim for if we intend to be competitive.