MRP Operations

How is SMS used in MRP operations?

SMS includes features specifically used in MRP operations.  These inventory operations typically have high set-up costs, several components and frequent engineering changes.  Since these conditions exist, SMS recognizes the need for EOQ sizes that reflect the need for substantial production volumes.  These inventory operations don't usually have "slow moving" parts.  In many cases, these inventories have a substantial number of expensive finished goods.

Does SMS include a Bill-of-Material?
Yes it does!  Any number of levels can be accommodated by SMS and many clients take advantage of this feature.  Even some "finished goods" warehousing operations use this for "loose sales" and "kit packaging" which require only one or two levels of roll up.  SMS can accommodate up to 99 levels.  Like a proper Bill-of-Material function, SMS rolls up the component requirement (not the component forecast).  Individual component lead times are incorporated into the roll-up schedule.  Safety Stocks are recalculated to incorporate both dependent and independent demand for more accuracy.

Does SMS include Superceding Part Number logic?

Yes it does!  Engineering changes are frequent in this type of inventory operation.  Production requires precise items numbers that are current.  In many cases, one item may be replaced by several other items.  In the case of chemical production, one ounce of chemical "A" can be replaced by 1.3 ounces of chemical "B".  SMS includes a supercession ratio for this possibility.

Does SMS plan for "pre-sold" inventory demand?
Yes it does!  Some production operations are designed to accommodate long term customers who place their orders in advance.  This portion of the "forecast" is a known quantity.  SMS blends this "known future demand" into the statistical forecast to cover both planned sales and estimated sales.  Options include making sure the statistical forecast is "at least equal to" the known forecast - or "adding the known forecast" to the statistical forecast.