Original Date: 10/27/2003
Revision Date: 01/18/2007
Information : Manufacturing Resource Planning System
Auto-Valve, Inc. reduced the number of people required for production planning and improved delivery performance to more than 99% with the implementation of its Manufacturing Resource Planning system.
Prior to 1999, Auto-Valve, Inc. (AVI) did not have a manufacturing planning system other than DOS-based accounting software. Annual inventory counts, which consisted of approximately 3,000 different part numbers with a total part count of approximately two million pieces, were performed manually. Process control and documentation controls did not exist, except for the bills of material and manufacturing costs. The burden rate could not be collected for the shop. Manual scheduling was used based on estimates rather than historical data from actual orders, resulting in excess and obsolete inventory. From 1995 to 1998, on-time delivery performance declined annually from 75% to 65%.
In 1999, AVI implemented Industrios’ Manufacturing Resource Planning (MRP) software to help solve some of the existing problems. The total cost of this system, including software, training, and customization, was approximately $100,000. The use of the MRP software eliminated the manual inventory counts (other than spot-checks by the Quality department) and detailed process planning. The MRP system contains raw material requirements and automatically generates requisitions, which can be turned into purchase orders with a click of the mouse. Job cost summaries and work-in-process costs are readily available. The production scheduling module allows detailed part scheduling to occur based on specific time periods, eliminating the production of unwanted inventory. Only parts that are required for sold orders are produced and put into stock. On-time delivery performance for AVI is over 99%.
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