Understanding Action Messages and Exception Codes in MRP: A Comprehensive Guide for Planners

Material Requirements Planning (MRP) is at the heart of efficient manufacturing operations, ensuring that materials and resources are available at the right time and in the right quantities. To achieve this, planners rely on system-generated tools like action messages and exception codes. These tools provide critical insights into maintaining the accuracy of plans, resolving conflicts, and keeping operations running smoothly. This article delves into these concepts while integrating advanced topics such as regeneration and net change MRP, the importance of updating MRP records, and techniques for managing system nervousness.

Action Messages: Proactive System Guidance

Action messages are real-time system alerts designed to prompt planners to take actions that align the system's data with real-world conditions. They ensure that inventory and production schedules remain synchronized with demand. Common action messages include:

• Release Order: Instructs the planner to convert a planned order into a firm order to initiate procurement or production.
• Reschedule In: Advises accelerating an order to meet an updated or earlier demand date.
• Reschedule Out: Suggests postponing an order due to a delay in demand or excess inventory.
• Cancel: Recommends canceling an order that is no longer required.

Example: Handling Demand Shifts with Tolerances

Scenario:

• A component has a lead time of 20 days, and demand has shifted forward by 5 days.
• Tolerance thresholds set in the MRP system allow changes up to ±5 days without requiring a regeneration.

Action Message Generated: "Reschedule In" for a planned order, as the demand now falls exactly at the tolerance threshold.

Planner Action: Expedite the order by adjusting the scheduled receipt date in the system.

This example demonstrates the planner's responsibility to ensure that action messages are addressed promptly within tolerance limits to avoid unnecessary nervousness or disruption.

Exception Codes: Resolving Errors and Rule Violations

Exception codes highlight conflicts, errors, or missing data that require attention to maintain MRP integrity. These alerts act as problem-solving tools, identifying issues early and ensuring they are addressed within the system rather than informally. Common exception scenarios include:

• Rule Conflicts: Violations of lead times, lot-sizing rules, or safety stock policies.
• Missing Data: Errors such as incomplete supplier information or undefined lead times.
• Capacity or Forecasting Issues: Overloaded resources or mismatched demand and supply forecasts.

Example: MPS Conflict with Lead Time

Scenario:

• The MRP system generates a Master Production Schedule (MPS) for a finished good that requires a critical raw material with a lead time of 30 days.
• The MPS plans production to start in 25 days, violating the lead time rule.

Exception Code Triggered: "Lead Time Violation – Material Unavailable for Planned Start." Planner Mitigation:

1. Adjust the MPS to accommodate the 30-day lead time.
2. If necessary, explore alternative suppliers with shorter lead times or expedite shipping.
3. Ensure lead time data in the system is accurate to prevent recurrence of this issue.

This structured approach ensures conflicts are resolved systematically, minimizing manual interventions.

Regeneration and Net Change MRP: Keeping Plans Accurate

MRP systems must constantly evolve to reflect changing conditions. This is achieved through two key methods: regeneration MRP and net change MRP.

Regeneration MRP

• A full recalculation of all planned orders, net requirements, and inventory positions.
• Typically run during major system updates or after significant changes in demand or supply patterns.
• Useful when tolerances are exceeded, such as net changes > 10% or when a supplier update impacts multiple orders.

Example:

• Demand for a product line increases by 15%, exceeding the 10% tolerance threshold.
• Regeneration MRP is initiated, recalculating all dependent requirements to ensure the supply chain aligns with the new demand levels.

Net Change MRP

• Focuses only on areas of the plan where changes have occurred, such as new orders, updated lead times, or demand shifts.
• Faster and less disruptive than regeneration MRP, it avoids unnecessary recalculations.

Example:

• Net change exceeds $2,000 in value for a single item due to a new customer order.
• The system recalculates requirements only for that specific item and its dependent components.

Both methods ensure that the system remains accurate and responsive while avoiding system nervousness—frequent, unnecessary adjustments that can destabilize the supply chain.

Avoiding System Nervousness

System nervousness arises when small changes in demand or supply lead to frequent and unnecessary recalculations or order modifications. This can create inefficiencies and confusion among planners, suppliers, and production teams. Strategies to avoid nervousness include:

• Tolerance Settings: Define thresholds for acceptable changes in lead time, order quantity, or demand. For example, rescheduling within ±5 days or changes less than 10% may not trigger a recalculation.
• Net Change Limits: Only allow updates to areas where significant deviations occur, such as changes exceeding $2,000 in value or 20% of demand.
• Frozen Zones: Lock short-term schedules to prevent changes within a specific time frame, allowing planners to stabilize operations.

Example: Implementing Tolerance Rules

Scenario:

• Demand for a product increases by 8%, which falls within the 10% tolerance.
• The MRP system does not trigger a regeneration, reducing unnecessary recalculations.

Result: The planner only adjusts future orders if demand increases further, avoiding disruptions in current operations.

Planner Responsibilities After Order Release

Once an order is released, the planner assumes responsibility for monitoring and adjusting the execution. Key responsibilities include:

1. Updating MRP Records: Ensure the system reflects real-world changes, such as lead time adjustments or supplier delays.
2. Monitoring Net Changes: Review deviations that exceed thresholds and decide whether to trigger regeneration or apply targeted updates.
3. Mitigating Supply Chain Issues: Address shortages or excess inventory caused by demand fluctuations.

Example: Managing Released Orders with Net Changes

Scenario:

• An order for 1,000 units is released, but a customer increases their order by 300 units, exceeding the 20% net change tolerance.

Planner Action:

1. The planner updates the MRP system to reflect the new order quantity.
2. A targeted net change recalculation is run for the specific item and its dependent components.
3. Communication with suppliers is initiated to expedite the additional quantity.

By actively managing released orders, planners ensure accurate execution and minimize disruptions.

Conclusion

Action messages, exception codes, regeneration MRP, and net change MRP are critical tools for maintaining the accuracy and efficiency of MRP systems. Together, they provide planners with a structured framework to address issues, resolve conflicts, and adapt to changing conditions. By leveraging tolerance settings, targeted recalculations, and clear responsibilities, planners can mitigate system nervousness and ensure smooth operations. In the dynamic world of manufacturing, these tools are indispensable for achieving reliable production schedules and optimal inventory management.