| 1. ManEx Minute - 352008 - Obsolescence of MPN |
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"It doesn't work to leap a twenty-foot chasm in two ten-foot jumps."
-American Proverb
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Issue 352008
For this issue, we address how to handle Manufacturer Part Numbers (MPN) that are going obsolete, or will no longer be approved after existing inventory is consumed.
As always, We look forward to your participation and feedback as you gain new insights and become a more effective provider of Electronic Manufacturing Services.
Sincerely,
David Sharp
ManEx, Inc.
Business Case - Material Requirements Planning
Obsolete or Disallowed MPN
North Eastern Company* (N.E. Company) has a reliable system from tracking both turnkey and consigned parts. So far, they have been able to keep inventory levels in check and costs under control.
Recent events may put their system to the test. The largest customer just decided to make significant changes to their AVL. To reduce the financial impact of the change, the customer is going to phase out the old parts rather than just scrap the lot. While this makes the transition easier and potentially less expensive for the customer, it has the possibility of becoming a logistical nightmare for NE Company. They must carefully manage the transition from old to new AVLs.
How will they prevent MRP from driving demand for replacements until existing inventory is consumed? How will they ensure they have the new AVLs in-house in time to avoid production delays? Is there a way for them to prevent users from replenishing or consuming the AVLs?
Business Case Solutions
- Excel Spreadsheets - It seems that for most issues EMS companies face, someone can and probably has created an Excel Spreadsheet to manage it. This is a quick way to create a list to track, and would work for a small list. However, it would require users to frequently check and update the list to be sure they consume and replace the parts. With a list of any significant size, this method could quickly become unmanageable. Additionally the lack of system integration would make it possible and likely to either order excess inventory or skip ordering a needed part and create a production delay.
- Create Separate Warehouses - moving the soon to be obsolete inventory into a separate warehouse will keep the inventory separate and allow the system to consume it before requesting replacements. However, buyers will have to pay special attention to the parts they are buying so as to avoid reordering the soon to be obsoleted inventory.
- Loaded as Consigned Inventory - moving the inventory to consigned inventory would ensure MRP does not try to replenish the parts, but it may make it difficult to use the parts until they are gone.
- Special Designation - Using a special designation in a user-defined or other field would produce similar results to moving the parts to a separate warehouse, unless MRP will consider that field. If this is possible, then that field can be used to prevent MRP from replenishing the obsoleted inventory. Otherwise, it is simply a tool to segregate the parts in the system, while still requiring manual monitoring of the parts.
* Company name has been changed.
ManEx Case Solution
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Here is a list of upcoming topics. Please email your thoughts, comments, and suggestions to mym@manex.com
- Production Offsets
- Comprehensive AVL Management
- PO Notes
- Part Shortage Tracking
- Excess Inventory
If you have any topics you would like to see addresses in future newsletters, please send them to topics@manex.com.
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©2008 All Rights Reserved.
ManEx Minute is a weekly email distributed by ManEx, Inc.
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Developing with YOU in mind!
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| 1.1. ManEx Solution - 352008 - Obsolescence of MPN |
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ManEx Case Solution
NE Company decided to use the special fields in ManEx to disallow from purchasing. As soon as they received the list of obsoleted manufacturers, they checked the appropriate box for each within the item master. As the inventory was consumed they removed it from the customer's AVL. Using this method, they were able to consume the existing inventory and have the replacement parts on hand as needed all without outside tracking.
Not all inventory was consumed before the customer decided to update the AVLs. For these parts, NE Company simply checked the appropriate box to disallow the parts from kitting. Now they have visibility of the inventory, but cannot consume it in production until the parts are once again approved.
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