Re: <*> Calculate top level lead time based on component lead times

Peter:

Unless the lead times are "certified" as maintained in current status,
particularly for purchased items, the whole exercise is to be avoided.

Based on personal experience I can tell you the chances for doing
significant marketplace harm are substantial.

For example, one client ran their ERP system's lead time update process,
accepted the values as calculated and became automatic order promising based
on those new values.  One very popular product line saw a dramatic sales
drop within weeks.  Turned out a few purchased components were still
carrying long lead times.  These forced the end items' promised delivery out
to 6 weeks.  Competitors were promising 3 weeks.  Guess where the business
went.

I advise my clients to first do a lead time audit.  
Initially focus on the A class end items - get their components' lead times
updated.
Then go on to the B and C items.

One other point: Early in the audit empower the planners and buyers to
maintain lead time currency.  
Make it a measurable component of each planner's and buyer's job
description.
If the effort to update lead times is treated as project you'll be at it
again in 12 to 18 months.

Regarding which method to use:
Use one that is at least driven by recent sales history and sales forecast
to a reasonable horizon - 3 months is not reasonable, neither is 3 years.
End items not currently moving or not forecasted to move will need a detail
review by the demand manager when they do sell so there's no need to spend
time on them.
But if your ERP has it use the batch lead time update process.

Regarding the full process:
Once the audit is complete and component lead times updated I have my
clients:
1) copy the MRP data to a "test" environment - unlike standard costs most
ERP systems don't support old lead times and new lead times.
2) run the ERP system's lead time update process on the test database.
3) print off end item information
4) Have sales and marketing conduct a review. (Be prepared, the howling will
be long and loud.)
5) Convene a management meeting to review Sales and Marketing's
recommendations- make sure production, production planning and purchasing is
part of the meeting.
6) Update the "test" data per the meeting's agreements.
7) Update the live database's from the test data using a custom program.  
How much you update depends on the circumstances.
Some clients update only end item lead times, others do the update en mass.

Hope this helps.


Roy Luce

Direct:	847-540-9635
	800-913-PLUS (7587)
Cell:	847-910-0884
Email:	rluce-HRyyShxxSFd2eUv6p1oa/[email protected]

-----Original Message-----
From: mapics-l-bounces-Zwy7GipZuJhWk0Htik3J/[email protected] [mailto:mapics-l-bounces-Zwy7GipZuJhWk0Htik3J/[email protected]]
On Behalf Of Peter_Vidal-/[email protected]
Sent: Wednesday, March 09, 2011 8:48 AM
To: mapics-l-Zwy7GipZuJhWk0Htik3J/[email protected]
Subject: [MAPICS-L] <*> Calculate top level lead time based on component
lead times

Good morning / afternoon list!

We need to establish updated lead times for parts sold to our customers. 
The business is proposing using the technique of blowing up the BOMs and 
based on the component leadtimes, use the greater of any of the resulting 
values and apply it to the finished goods' lead time values.

I have also thought about using current MRP results to get this because 
the bill is already exploded; however, this will only be valid for 
finished goods that have demand: all others will not be analyzed then.

So I would like to know if you have done something like that and if so, 
can you share your thoughts and suggestions on this?

I appreciate your help on this one, as always.

Very best regards,

PETER VIDAL
PALL CORPORATION
SR System Analyst | WH Application Development
10540 Ridge Rd., Suite 203, New Port Richey, FL 34654-5111 
UC#: 262-2414 | Direct: 727-844-2414 | Fax: 727-815-3120 | www.pall.com 

"Think like a wise man but communicate in the language of the people."
William Butler Yeats (1865 - 1939)

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