Track: Production Planning and Management

Abstract

In a supply chain, the material requirement planning is crucial for companies to satisfy customer demand as well as manage the shop floor and operation costs. The lead time variability impacts the material requirement planning, critical in improving the production and inventory efficiency, scheduling and bill of materials, necessary to keep the flow of goods in the production process. Lead time variability happens for several reasons such as production capacity constraint, resource constraints or suppliers delay during the field application.  This study illustrates the technique to integrate lead time variability in the material requirement planning that most companies want to adopt. Most companies use MRP and lead time variability issues separately. The integration of the lead time variability in MRP technique reduces the stockout risks, excessive stocks, and unnecessary rescheduling in production planning. The procedure is then applied to a mid-level aero product manufacturing company to prevent unavoidable delay and overstocking without a significant computational burden.