Nervousness in MRP
Bill of Material- Low-level Code
We are going to make two parent parts product A and product L. So, they are level 0. Product A is made from product B and C whereas, product L is made of product D and F.
Now how does MRP calculate? It’s going to calculate the level 0 parent parts. It calculates the requirement of product A, then product L. Then it’s going to calculate product B, C, and F. why is D tucked down at the bottom? That’s because of something called low-level code. Low-level code is the lowest level where that part exists in that bill of material.
So that’s why even though it at level 1 of parent product L, it actually sits at level code 2. So, MRP is going to get together all the requirements at the higher levels and then it’s going to calculate the requirement of D.
Nervousness
Any input change ripples through any involved BOM or product structure. This is something is called nervousness.
It’s defined as The characteristic of an MRP system when minor changes in higher level (e.g. level 0 or 1) records or the master production schedule cause significant timing or quantity changes in lower level (e.g. 5 or 6) schedules or orders.
It looks like this: I have a change in the material at the topmost level i.e. FPA, it ripples all the way down through the Bill of the material of FPA.
Let’s say, for example, to produce 1 unit of FPA, I need 1 unit of ICA and SAA each. Now to produce 1 unit of ICA, I need 5 KGs of SAB and to produce 1 KG of SAB I need 20 KG of PPB. So effectively if the master production schedule of FPA is 100 Units, I need 10000 KGs of PPB. If there is a minor change - let’s say if I change the master production schedule of FPA from 100 to 110 units, I will fall short by 1000 KGs for material PPB.
Similarly, rescheduling the MPS, in general, leads to replanning activities on low-level items. Because of lot-sizing, even minor time-phasing changes on the MPS level may lead to major rescheduling actions on lower stages. In particular, changes in lot sizes on the MPS level may cause rescheduling of released orders at lower levels.
Now it also affects any shared component. Let’s say if SAB or SAG are shared component items, then it really does impact other product structures as well.
