It may sound mysterious, but understanding how to leverage it can greatly enhance your knowledge about the bill of materials. So, let's dive in and demystify the phantom BOM! Let’s start by answering the question, what exactly is a phantom bill of materials? Think of it as a virtual subassembly that doesn't physically exist.
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The planning bill of material is just that, used for planning. This type of bill of materials is not real, it is an artificial listing of items that is used for purposes of planning.
Inventory Turnover is the number of times your inventory cycles or turns over in a year or other defined period. Inventory turnover can help an organization understand how efficiently their inventory is supporting sales. The inventory turnover number implies how often inventory was bought and sold throughout the year or other defined period. Put another way, inventory turnover is an indicator of how well a business is using their inventory. For example, how many dollars of sales from a cost perspective are being supported by each dollar of inventory.
System nervousness in Material Requirements Planning (MRP) refers to the instability and frequent changes in the MRP system's schedules and plans.
Regeneration in Material Requirements Planning (MRP) refers to the process of completely recalculating the entire MRP plan from scratch. During this process, all existing planned orders are removed, and the MRP system generates new planned orders starting from the end items and moving through the Bill of Materials (BOM) structure. This ensures that the MRP system's data is fully updated and accurate, reflecting the most current demand and supply conditions.
An indented Bill of Materials (BOM) in manufacturing is a detailed hierarchical structure that lists all components, subassemblies, and raw materials required to manufacture a finished product. Unlike a flat BOM, which lists components without showing their relationships, an indented BOM illustrates the parent-child relationships between assemblies and their subcomponents.
Cumulative Lead Time in manufacturing refers to the total time required to produce a product from the start of the production process to the completion of the final product, including all stages of production and any associated waiting times. This metric is crucial for planning and scheduling as it helps manufacturers understand how long it will take to fulfill an order from the time it is placed until it is ready for delivery.
Order lead time is a planning factor that many ERP and MRP systems use to plan and calculate the amount of time required to produce a product. While the order lead time is generally not the total lead time, it does take up a portion of it.
The manufacturing bill of material is also known as the MBOM. It is used when a manufacturing company needs to display all of the components and assemblies that are needed to manufacture a finished product.
Let's look today at Scrap Rate. Let’s get started. Material Requirements Planning is an essential process in manufacturing, helping companies ensure they have the right materials, in the right quantities, at the right time. One crucial factor that can significantly impact MRP is the scrap rate. So, what exactly is the scrap rate?
A multi-level bill of materials is the complete opposite of a single level bill of materials. Multi-level bills of materials are used for more complex builds. These types of bills of material include components and sub assemblies.
In Material Requirements Planning (MRP), net requirements refer to the actual quantity of materials needed for production after considering existing inventory and scheduled receipts. Essentially, net requirements are the difference between the total required quantity of an item and the available supply, ensuring that enough materials are available for production without overstocking.
Bills of material are among the most crucial inputs in material requirements planning. There are many different types of bills of material. Establishing, managing your bills of material and keeping them up to date will make building items much more effective. It will prevent defects and help avoid over processing waste. So, what is a bill of materials?
Dependent demand is the demand that is directly related to or derived from the bill of materials structure for other items or end products which are independent demand.
A sequential ordering system is a method of assigning unique identifiers to items, transactions, or records in a sequential numerical order. This system is often used in inventory management, manufacturing, and various administrative processes to maintain a clear, straightforward, and easy-to-follow sequence.
Manufacturing lead time is different than lead time. Manufacturing or production lead time is the total amount of time it takes to "manufacture" or "produce" an item.
A changeover is the work required to change a specific machine, resource, work center or line from making the last good piece of an item to making the first good piece of another item. That means that if the first good piece after the changeover is not good the changeover is not complete.
A single-level bill of materials is one level of an assembly and does not include any lower-level subassemblies. It displays only one level of components that would be used in their direct parent item.
One element of holding costs is risk. Risk costs are the risk that is assumed when inventory is acquired. In addition to this risk costs refer to loss of inventory value. This is often referred to as the shrinkage that occurs within inventory.
Synonym: Manufacturing Lead Time.
Pegging reports are used in both material requirements planning and the master production schedule. In manufacturing, a pegging report is a record that shows the relationship between demand and supply.
Strategy is defined as a plan or method chosen to bring about a desired future. Such as; the achievement of a goal, objective, countermeasure or solution to a problem.
The goal of the Master Production Schedule (MPS) is to balance supply with demand by period, which is often referred to as planning horizon. Your production and items coming in from your supply chain is your supply, and the forecast or confirmed sales is your demand. The Master Production Schedule outlines which items need to be produced, in what quantity and when. The MPS does not go into detail regarding the operations or tasks.
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June 2024
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