MRP with high uncertain yield losses

Certain manufacturing systems, notably those in high technology precision casting and integrated circuit production suffer from process yield losses which are both significant in quantity terms and are also highly unpredictable. This poses special problems for the provisioning of materials to support a manufacturing program and for the detailed scheduling necessary to update the priorities of work in process batches as losses occur. This paper establishes a framework of analysis to handle this problem in MRP logic. It describes the mechanisms available and discusses their relevance to the market environments in which the company is operating. The key conclusion of this paper is that different solutions are required for different market circumstances. The four key strategies developed are: (A) For continuous schedules, make-for-stock: Use mean yield rate and fixed buffer stocks. (B) For continuous schedules, make-to-order: Use mean yield rate, fixed buffers and a yield to finish monitoring system. (C1) For single batch production make-to-order: As for B but using a desired service level yield rate. (C2) For multiple batch production, make-to-order: As B but using a variable yield rate by batch. The implementation of each of these is described in relation to the business objectives of cost effectiveness and customer satisfaction.