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Demand Consolidation out of Independent Material Requirements Planning Engines

IP.com Disclosure Number: IPCOM000020287D
Original Publication Date: 2003-Nov-10
Included in the Prior Art Database: 2003-Nov-10
Document File: 2 page(s) / 5K

Publishing Venue

IBM

Abstract

Demand Consolidation and Optimization of Independent Material Requirement Planning Systems

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  Demand Consolidation out of Independent Material Requirements Planning Engines

Scenario A Corporation is producing similar products in different plants in different geographies.

Problem:

    Material Requirement Planning (MRP) Systems are generally connected to a local entity. The system calculates demand by exploding a Bill of Material, result is a quantity per partnumber which is assigned to a specific vendor number.

    The local MRP can only handle an exact defined partnumber/ vendor combinations for planning and purchase order activities.

    However, there are alternative part numbers (i.e. different tires can be used to build a car), and there are alternative sources (i.e. the tires can be purchased from different vendors).

    On Corporate level the results from the local MRP's need to be consolidated and optimized. Decisions are made related to splitting demand to sources and the use of alternative part numbers. The result of this decision might change the partnumber/vendor combination calculated by the local MRP's.

Solution:

The results of the local MRPs are consolidated in an overall database, which omits the partnumber/vendor combination and groups the parts into Commodity groups (= on Commodity group is one placeholder partnumber standing for group of alternative partnumbers). All alternative vendors and their capacities, T/C's, locations are maintained in the Demand Consolidation tool.

    The Demand Consolidation tool offers an graphical interface to the Corporate Planner and calculates an overall on optimization by assigning the total demand to the different sources, taking into consideration - prices/quantity relations per vendor
- capacity rebalancing
- transport optimization
- leadtimes
- contractual commitments

    The Corporate Planner can change this calculation using the graphical interface, i.e drag and drop demand buckets to different sources, the system real time recalculates total cost

    The result is a overall optimized and changed partnumber/vendor...