原创 What is Driving Excess Materials?

Our Fiscal Q2 ended yesterday, we have done whatever we can
do, such as stopping materials in-take, stopping production if we can not ship
it out within Feb, disposing onhand inventory in all possible means especially
RTV, RTC… yes, we made every effort! And now, a brand new Quarter begins, we
are still perturbed in mind, but pretending to be strong, praying
secretly for the desired Q2 ending DII.

Actually, the battle for DII defense started earlier than we
thought. It is time for us to go through all key factors impacting DII once
again.

1. Business Environment : Make-to-order/Make-to-stock /Assemble-to-order/Configure-to-Order

   Nowadays,
   we have the above all kinds of business modules, especially the last two kinds,
   it requires-

• Specific
  products are configured based on many possible options

• Many
  manufacturing companies fit into this, including automobiles and computer
  systems companies.

• Semi-completed
  goods are stocked, completed upon received of customer PO’s.

  These
  business modules will mainly define when we can produce the product( changing
  the raw components to Finished goods), and when we can transfer the FG
  inventory from we owned to customer owned. We have to rely on business guys a
  lot on this area, to push customer place orders for us to arrange production, to
  push customer to pull the FG from HUB( 3rd party warehouse), to get
  a better Inco-terms for inventory liability transfer point…

  2. MRP Input:

• MPS

• BOM

• Inventory data

• Planning
  parameters---Planning parameters include lot size, lead-times (internal
  manufacturing lead-time, goods receipt process time, external materials
  lead-time, order release lead-time), scrap factors (loss percent), safety
  stock, ABC Classification, MOQ, SPQ, Media requirement  etc.

What is MRP? Material
Requirements Plan, the
time phased Explosion of the material requirements based on the Bill of
Materials, Lead Times, Order Quantities and Safety Stocks to determine what to make or buy and when.
 Normally,  MRP = Demand – Supply

 Note: Any change on
above items can impact the MRP, resulting in critical shortages or
excess/obsolete materials if managed without a proactive plan.   MPS
is to drive the necessary resources to assure customer satisfaction while minimizing
liability to us.

        MRP should be driven by the Master
Production Schedule,

• What raw material or components are required for
  a product

• What quantity those materials are needed

• When the material must be physically available
  for production.

  Let’s look at how we do it!

• 

• And let’s see how MRP works – we can see that the Inhouse
  production Lead time will all add up to the total Leadtime. One of the primary
  opportunities to prevent early material pull-in is keeping the proper Manufacturing
  inhouse correct in SAP. If the BOM is not layered correctly it will drive
  inventory early. I we take weekly build lot size, the lead-time is less likely
  just “7 days”. The Material team, very importantly, need to stay very tight on
  the “true” in house parts lead-time and proper BOM structure.

Yeap, here it is Q3, a new round of PDCA! First thing First!
We have to ensure our PLAN is correct 

– 1)BOM,

2) Planning parameters  especially Leadtimes,

3) MPS( aligned with revenue projection & resources
capability).

And then the rest is just EXECUTION! No matter what Q2 end
is like, let’s now fight for a better Q3!