Parts Quantity Analysis

If you are serious about your lean journey, you will need to jump into a Parts Quantity Analysis (PQA), also referred to as a Product Routing Matrix. This is often a huge undertaking, regardless of the type of MRP or ERP system you are running. There are times when it just has to be completed and there is no easy way to do it to get reliable results that we are confident we can make good assumptions with.

What is a Parts Quantity Analysis?

A PQA is a review of all of the product data for parts manufactured or purchased over the last 12 months. With a good ERP system and easy to use reports, most of the data should be easy to find and manipulate into a usable fashion. The type of lean project you are doing will influence the exact data you will need. There are two main types of PQA:

1. For supply chain improvements

When looking at implementing a wide scale kanban system, accurate data is needed to ensure inventory levels are set at the correct minimum and reorder levels. Quality issues and understanding your suppliers, as well as your customer buying habits, is essential to laying a good foundation and balancing the right inventory levels with good lead times.

2. For factory layout and cell design

With this type of PQA part routings are needed as well as the above information. When completing a PQA to dermic cell design and factory layout understanding your product family groupings is essential

Why do a Parts Quantity Analysis?

We will need to investigate our products data to this level to ensure we have a good understanding of our supply and manufacturing processes before implementing a lean enterprise system. All good lean systems are based on a foundation of reliable data and estimations that the future will continue as the past has happened. If your production is not stable or includes seasonal variation, then considerations must be included (and documented) on the best way to handle these fluctuations. If the task of completing the analysis is too overwhelming, it is a good indication that you actually do need to complete the analysis.

How to complete a Parts Quantity Analysis

Even with a good ERP system, the TXM team is yet to find a shortcut to this crucial step of implementing a lean enterprise system. Make sure your cross-functional team has a good product knowledge; this will enable the team to run frequent sanity checks as the data is being compiled and reviewed. If the data is not readily available you will need to pull together the documentation that is available; sales orders, works orders or production travellers can all assist in putting  a picture together of your production for the last 12 months.

Start with a top list of part categories and choose the group that has the most value to your company. Decide which fields you need – it is always better to start with more data than you initially think you may need, rather than having to go back and add extra fields. Run reports based on the first set of criteria. It is preferential to be able to pull this data into Excel so it can be easily manipulated – adding in family classifications, totalling quantities used for the last 12 months, grouping products together when used across many cells or manufacturing areas.

Continue to build up the data set for your chosen fields for all of your main products, then run an eye over the data to check that it makes sense, asking questions like “would we have really used 10,000 items this year?” The answers to these type of sanity check questions will make sure you are on the right track.

Not what to do with the Parts Quantity Analysis?

When the analysis is complete, you can set the rules and fundamental assumptions for your lean enterprise system. activity. These many include how many days or weeks or months of stock you need on-hand to meet a set lead time of manufacturing. You may investigate how much storage space you will need to keep this level of inventory or run a model to see whether this meets the company goals of stock turns or cash flow. You can see the best way to group equipment to layout new manufacturing cells and maximise the use of each machine.

With good data as a foundation, all of the decisions you need to make while implementing a lean system will be much easier to understand and explain to others. The secondary benefit is being able to review and adjust the data as product patterns change over time.

If you need help with your Parts Quantity Analysis, then give the Lean Consultants at TXM a call.

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