A viable production software solution is one that takes finites into consideration. This is for the simple reason that your production planning and scheduling estimates will be wrong if you assume an infinite availability of raw and WIP materials. Expressed mathematically, it is because
Time required to produce
= (production rate x quantity to be produced) + Setup time + waiting period
If the quantity to be produced is not known, then the time required to produce it cannot be computed.
The information about required quantities to be produced comes from the bill of materials [BOM] (in case of discrete manufacturing) or recipe (in case of process industries it is recipe). In a BOM or recipe, the ratio at which raw materials are consumed to produce one unit of the finished product is defined. From this information, total raw materials required for producing ordered quantities of finished products are calculated, but there is a catch. There are two considerations:
1. If capacity of the manufacturing unit as well as capacity of work centers is not taken care of, then the software will generate the wrong quantities of materials requirements. So the software should have the capability to match the capacities of the manufacturing unit and work centers against the order quantities.
2. If routing is not taken care of, then the calculations will be wrong. It is possible that two machines in the same work center may not process the same WIP materials. So one type of WIP material may always be processed at one particular machine while another type of WIP material may always be processed at another machine. Any machine has a finite capacity. If the WIPs for incoming orders only go to one particular machine, then the machine will not be able to process the WIP in the given, finite time period. Good software should be able to define production process routings and then be able to sum up quantities.
If the software is not able to handle these things then it will be a useless piece of software for you.
The other problem with many production planning and scheduling software vendors is that their software is unable to identify the bottlenecks in the process. Because of this, work centers downstream from a work center that is a bottleneck may be idle for want of work, and those work centers that are upstream may be clogged with inventory.
So in terms of MRP and MPS, the MRP should be run first to determine exact quantities of required WIP materials against the quantities of required finished products. From the capacities of work centers and quantities of finished products and work in process materials produced at these work centers, lead times are calculated. Adding these lead times together will give you the total lead times required to produce finished products (keeping in mind that the cost of production can be calculated from the duration of time machines are running, the labor required at these machines, and labor pay rates). Inventory costs can be calculated from the duration for which inventory of finished products and WIP materials are kept. Most of this information will come from the BOM. In most of the software in the market, it is MPS which is run before the MRP. Thus it is assumed that infinite capacity and infinite work in progress material are available for making schedule. Ultimately, this is why a schedule made this way will always be wrong.
Time required to produce
= (production rate x quantity to be produced) + Setup time + waiting period
If the quantity to be produced is not known, then the time required to produce it cannot be computed.
The information about required quantities to be produced comes from the bill of materials [BOM] (in case of discrete manufacturing) or recipe (in case of process industries it is recipe). In a BOM or recipe, the ratio at which raw materials are consumed to produce one unit of the finished product is defined. From this information, total raw materials required for producing ordered quantities of finished products are calculated, but there is a catch. There are two considerations:
1. If capacity of the manufacturing unit as well as capacity of work centers is not taken care of, then the software will generate the wrong quantities of materials requirements. So the software should have the capability to match the capacities of the manufacturing unit and work centers against the order quantities.
2. If routing is not taken care of, then the calculations will be wrong. It is possible that two machines in the same work center may not process the same WIP materials. So one type of WIP material may always be processed at one particular machine while another type of WIP material may always be processed at another machine. Any machine has a finite capacity. If the WIPs for incoming orders only go to one particular machine, then the machine will not be able to process the WIP in the given, finite time period. Good software should be able to define production process routings and then be able to sum up quantities.
If the software is not able to handle these things then it will be a useless piece of software for you.
The other problem with many production planning and scheduling software vendors is that their software is unable to identify the bottlenecks in the process. Because of this, work centers downstream from a work center that is a bottleneck may be idle for want of work, and those work centers that are upstream may be clogged with inventory.
So in terms of MRP and MPS, the MRP should be run first to determine exact quantities of required WIP materials against the quantities of required finished products. From the capacities of work centers and quantities of finished products and work in process materials produced at these work centers, lead times are calculated. Adding these lead times together will give you the total lead times required to produce finished products (keeping in mind that the cost of production can be calculated from the duration of time machines are running, the labor required at these machines, and labor pay rates). Inventory costs can be calculated from the duration for which inventory of finished products and WIP materials are kept. Most of this information will come from the BOM. In most of the software in the market, it is MPS which is run before the MRP. Thus it is assumed that infinite capacity and infinite work in progress material are available for making schedule. Ultimately, this is why a schedule made this way will always be wrong.
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