MRP and Bill of Materials

A key component of operations management focuses on the material requirements planning (MRP) system.  Materials and processes must be available at the appropriate time in the manufacturing sequence in order to build the part in time to support schedule.  Defined in the bill of materials (BOM), the "ingredients" for building the part is listed in the MRP system for anyone who needs to reference it.

( A simple chair BOM)

A big challenge comes when the part is fabricated at a supplier, far from the home base of operations.  During my time as a engineer with Boeing, there were several instances where the raw material listed in the BOM was not available. Occasionally the supplier who built the part was not able to obtain the listed material.  If no equal substitute part was called out in the BOM, this presents a problem.  If no one  can deliver the required material, the supplier will try to get a new form of material added to the BOM at the last minute in order to keep the production line moving.  A new form may required some testing, and will certainly require a handful of experts to evaluate whether it is acceptable to substitute the new material form.

The problem is that even though a supplier may have not ensured it's provider of raw material can meet the demand, it now becomes  the prime company's issue to approve the new material form and do so in a hurry.  I have been through several fast changes to the BOM, which take awhile to do in a large company.  It creates a great deal of anxiety and stress.

The takeaway from this is to ensure your supplier has enough of the raw material that is required from the BOM, and have a backup material in case  there are material shortages.