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MPS loop

In this chapter we assume that you have a weekly MPS and you are not using a Dynamic VRO.

The idea of this chapter is to have to manage only one loop per part number and per week (i.e. till the next MPS).

The Pick-Up Order management becomes very simple: after the MPS process and the run of MRP, VRO loops are calculated, Pick-Up Orders are printed and stored in the template cart. If for a given supplier and a list of references you have to order 5 times till the next MPS (i.e. you have daily deliveries), you are going to use 5 copies of the same Pick-Up Order which will be stored in their associated folder of the template cart. You can use any of them for any order.

How can we do it? Lets come back to the previous example:

  Mo Tu We Th Fr Sa Su Mo Tu We Th Fr Sa Su Mo
Demand 100 80 110 90 20 50 0 90 120 100 50 80 100 0 80
Count Yes - - - |                    
Delivery         Yes                    
Count     Yes - - - - - |            
Delivery                 Yes            
Count               Yes - - - |      
Delivery                       Yes      


With the same constraints:

  • Delivery Safety Time = 1 day
  • Minimum Order Quantity = 40 pieces
  • Packaging quantity = 20 pieces
  • Batch size = 300 pieces

We found a loop of 660 for the first order sent on Monday, 710 for the order sent on Thursday. If we want to use only one loop value for the first week orders we need to choose the loop max: 710.

The consequence will be a higher in-house inventory after the delivery on the first Friday.


Conclusion

You have simplified the Pick-Up Order management but you have lost in inventory optimization. Anyway this is a good compromise if your demand is smooth like in a repetitive environment.

A main constraint remains: you have to calculate the loop for all deliveries ordered till the next MPS process and select the maximum found. It could be a huge task, except if you use the following method.

VRO loop calculation To calculate the VRO Loop requires to have a good understanding of all factors of the global SupplyChain.

MPS Loop with weekly Demand Combining the 2 previous cases is relatively common in the automotive industry. How it works and what you need to know.

Demand Safety Stock Sometimes Demand arbitration is complex to implement at the right level of the Bill Of Material to avoid extra inventory. The Demand Safety Stock can be a easy alternative.

Weekly demand Sometimes the demand is only available by weekly time bucket. In this case how to calculate the loop?

Loop: VRO versus Kanban VRO is not a Kanban system. One of the difference is the loop calculation.

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  SupplyFlow - USA - France