Lean and MRP: Q&A
Q: Can MRP and Lean co-exist and add value?
A: Yes
Q: How should MRP be used where Lean is being implemented?
A: MRP should continue to be used for its 3 primary functions:
» S&Ops - building a Sales & Operating Plan
» MPS - building a Master Production Schedule
» BOM - building a Bill Of Materials
Q: How should MRP and Lean interact with suppliers?
A: Part A
MRP should continue to forecast demand for the BOM, by providing suppliers with a 30/60/90 day look at the potential requirements for materials. This gives the suppliers a "heads up" view of what the materials requirements will be, enough to enable these suppliers to plan their own production, in concert with their own lead times. A3:
A: Part B
Lean should be used to actually request materials from suppliers on an "on demand" basis. The best vehicle to do this is the Batch Kanban Card...which is simply an accumulation of actual materials usage for the component part "bundled" into bit-sized JIT-type orders to the customer.
Q: How should supplier purchase orders be generated?
A: Blanket PO's should be utilized with each major supplier. These could cover some predetermined and finite time period...either 1 month, 3 months, 6 months, or 12 months. The blanket PO is a "license" to buy a certain amount of material from that supplier over this predetermined time period...but it is NOT a firm order. There is some risk to the supplier here that the customer may not actually "order" that same quantity of material.
Q: How do supplies actually get ordered?
A: Through the Batch Kanban Cards.
Q: How do suppliers get paid?
A: Through actual materials ordered and received through the Batch Kanban Cards.
Q: What if there's a discrepancy between the blanket PO and the actual Kanban orders?
A: The customer (us) will try to minimize the discrepancies, but will still ONLY pay for what is actually consumed.
Q: What if a supplier won't accept these terms and conditions?
A: Find a better supplier (this one can't...or won't...help you).
Q: How does the shop floor get scheduled?
A: Via Lean, 100%. Lean schedules the shop floor via an integrated pull system, which is based on actual customer demand, where the demand rate (Takt Time) determines how much to make and when to make it, plus the Supermarkets and Kanban Card Systems control the workstation-to-workstation flows.
Q: How do the MRP Shop Floor Execution routines fit in a Lean environment?
A: They don't fit at all. They represent a push system. Lean uses a pull system. The MRP SFE routines must be turned off.
Q: How will it be possible to monitor individual workstation
(either man or machine) performance without individual workstation performance reporting?
A: Gemba...which means "go & see" management. If you want to know the performance at an individual workstation level, you'll have to go there and see what it is. The performance will be measured and recorded there, just not reported centrally.
Q: How will individual workstations be scheduled?
A: By their "customer" which is the next downstream process.
Q: How will the workstation scheduling actually happen?
A: Via Production Kanban Cards, which are visual signals of how much to product, when to produce it, and in what sequence to produce it.
Q: What's the role of a Materials Resource Center (MRC) in a Lean environment?
A: Pretty much the same as it is in any environment: maintain an on-time, in-full, no-error (OTIFNE) supply of materials components and deliver them on request to manufacturing.
Q: How is the Materials Resource Center (MRC) role different under Lean
(vs. under a traditional MRP system)?
A: The Materials Resource Center (MRC) will deliver parts, in the exact quantity requested, in the exact amount, at the precise time manufacturing is requesting these parts, via the Withdrawal Kanban Card.
Q: Will Materials Resource Centers (MRC) still be required to build "kits" of component parts for production?
A: Yes...but, there'll be a difference in the requirement. All kits will be required to be released to production as full kits...absolutely NO kits will be allowed to be released as partials.
Q: What if the Materials Resource Center (MRC) simply doesn't have a component part, but have the rest of the parts required to make up that kit?
A: Don't release the kit from the Materials Resource Center (MRC). It simply CANNOT be released unless it meets the requirement of being 100% complete.
Q: Why can't we expedite the missing parts after the kits are released?
A: This would be a serious violation of the Kanban rules. Absolutely NO kits can be released incomplete! No exceptions!
Q: Will the Materials Resource Center (MRC) have a diminished role?
A: NO. Actually, it's a much more important role.
Q: Can the Materials Resource Center (MRC) become Lean?
A: Absolutely! It's a necessity!
Q: How can the Materials Resource Center (MRC) become Lean?
A: Via Supermarkets for component parts and Kanban systems for both Withdrawal and Replenishment.
Q: Will there still be safety stocks?
A: Yes...but they may be sized differently, primarily as a function of the suppliers lead times.
Q: Will the Materials Resource Center (MRC) personnel need to be trained in Lean?
A: Absolutely! They'll, for sure, need to understand Kanban and Pull Systems rules (there are 7 of them and they are fundamental to the system operating correctly). They may need to know how the production system is designed and how it operates under Lean. The Materials Resource Center (MRC) personnel need to be strategic and operational partners in this Lean environment.
Q: How will materials be delivered to the shop floor under Lean?
A: Via "Water Spiders".
Q: What the heck are "Water Spiders"?
A: People who are able to deliver materials exactly on demand, at the frequency requested, in the right quantity, cheerfully, and with 100% reliability. A very important job in a Lean system.