Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)               ISSN: 2248-9622        ...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)               ISSN: 2248-9622        ...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)                          ISSN: 2248-9...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)              ISSN: 2248-9622         ...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)              ISSN: 2248-9622         ...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)              ISSN: 2248-9622         ...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)              ISSN: 2248-9622         ...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)              ISSN: 2248-9622         ...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)              ISSN: 2248-9622         ...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)               ISSN: 2248-9622        ...
Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA)               ISSN: 2248-9622        ...
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  1. 1. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-2387 MRP-JIT INTEGRATED PRODUCTION SYSTEM Vaibhav JhaAbstract : combination creates what might be A combined MRP(material requirement considered a hybrid manufacturing system.planning) and JIT(just in time) system can be This hybrid system is commonly found in anymore effective manufacturing system which assemble-to-order environment. In this environment,utilizes the best attributes of each manufacturing raw material can be transformed into common semi-system need to accommodate the best planning finished products at a point where nextfeatures of MRP and the best execution features of downstream operations are controlled by customerJIT to address the changing needs of industry. orders. Therefore, the production of the earlierWhen MRP and JIT involve in any production upstream stations is controlled by push-typesystem than its balance the all entire production production, while the production of the laterand also minimize their limitation by work downstream stations is controlled by pull-typetogether. production. This type of assemble-to-order environment can be found in many electronics1. Introduction:- manufacturers. In this competitive era every firm/ JIT mainly work as pull system where asindustries tries to survive in this competitive market. MRP work as push system. The traditional MaterialRevolution in industrial engineering always made Requirement Planning (MRP) and the recentchanges in the production system. In past many firm Manufacturing Resource Planning (MRP II) representwere using MRP type push system. After that these the Push type of production control. On the otherfirm took interest toward pull type production system hand, JIT is an effective and proven Pull type oflike JIT. But in present time due to some limitation production control system.JIT concept is not appropriate for all type of The difference between Pull typeindustries. Many research works accomplish on the manufacturing systems and Push type manufacturingconcept of MRP and JIT for finding the best solution systems is the difference between producing to orderfor industrial problems. and producing to schedule. In a pull management, A combined MRP(material requirement upstream activities are geared to match the finalplanning) and JIT(just in time) system can be more assembly needs. When all component parts andeffective manufacturing system which utilizes the materials are pulled through production in an exactbest attributes of each manufacturing system need to correspondence to end-item demands, the theoreticalaccommodate the best planning features of MRP and ideal of stockless production is achieved.the best execution features of JIT to address the The Push type production control will run aschanging needs of industry. When MRP and JIT per the predetermined Master Production Scheduleinvolve in any production system than its balance the (MPS). The lead times for all the products and for allall entire production and also minimize their their operations are known and are used as a basis forlimitation by work together. the MPS. Work orders are issued based on thisThe main theme of MRP- JIT is “getting the right schedule for all the production time-frame inmaterials to the right place at the right time”. But JIT consideration and then flow of production isand MRP work on opposite type. rigorously followed up to ensure the timely MRP and JIT each have benefits. The completion.question is, Can they work together successfully andhow would one go about combining them? Most 1.1 Push type production systemmajor manufacturing firms use MRP. Of the firms Push system it is a conventional system ofusing MRP, Many in repetitive manufacturing also production. When a job completes its process in ause JIT techniques. Although JIT is best suited to workstation, then it is pushed to the next workstationrepetitive manufacturing, MRP is used in everything where it requires further processing or storing. In thisfrom custom job shops to assembly-line production. system, the job has a job card and the job card isA challenge arises in integrating the shop-floor transferred stage by stage according to its sequence.improvement approaches of JIT with an MRP-based This system works on MPS and aplanning and control system. The MRP/JIT continuous updating of the central computer database is carried out for each activity completed. As a result, 2377 | P a g e
  2. 2. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-2387quick and easy tracking of job progress can be done The main purposes of a basic MRP system arefrom any user terminal in the plant.  Ensure materials and products are availableFor absorbing the uncertainties in process and change for production and delivery to customers.in demand in any plants/ industries, push system  Maintain the lowest possible level ofalways used work in process inventory. inventory. The push-type system can be described as a  Plan manufacturing activities, deliverytop-down planning system because all production schedules and purchasing activitiesquantity decisions are derived from forecasted (Chase et al, 2006).demand in the master production schedule. The 1.1.2 Components of Material Requirementsystem produces as many parts as previously Planning (MRP)forecasted. The parts are released to the next stationas quickly as possible to avoid starvation at thedownstream stations. This characteristic enables thesystem to reduce delivery lead-time since many semi-finished or finished products are available. Mediumto large variation of demand may not cause anyconfusion because semi finished products are kept ateach station. The push-type system is better forplanning and controlling production activities.However, it causes high volume of work-in-process(WIP), both in the form of semi-finished and finishedproducts. As a result, the system suffers from highinventory holding cost.1.1.1 Material Requirement Planning (MRP)MRP Overview The earliest mechanism used to manageinventory was the reorder-point/reorder-quantitysystem. Under the reorder-point system, the depletionin the supply of each inventory item was monitoredand a replenishment order was issued whenever thesupply dropped to a predetermined quantity – thereorder point (Orlicky, 1975). Joseph Orlicky (orlicky, 1975), defined Figure1: basic components of MRP Source:MRP as following: (Stevenson, 2005)“A material requirements planning (MRP) system,narrowly defined, consists of a set of logically related The primary inputs of MRP are a bill of materials,procedures, decision rules, and records (alternatively, which details the composition of a finished product; arecords may be viewed as inputs to the system) master schedule, which details how much finisheddesigned to translate a master production schedule product is desired and when; and an inventoryinto time-phased net requirements, and the planned records file, which details how much inventory is oncoverage of such requirements, for each component hand or on order. The planner processes thisinventory item needed to implement this schedule”. information to determine the net requirements for According to Stevenson (Stevenson, 2005), each period of the planning horizon. Outputs from theMRP is a “computer-based information system that process include planned-order schedules, ordertranslates master schedule requirements for end items releases, changes, performance-control reports,into time-phased requirements for sub-assemblies, planning reports, and exception reports (Stevenson,components, and raw materials” 2005). MRP system suffered from two maindifficulties. One was the enormous task of setting up MRP inputsschedules, keeping track of large numbers of parts  Master scheduleand components, and coping with schedule and order The master schedule is one of three primary inputs inchanges. The other was a lack of differentiation MRP stating which end-items are to be produced,between independent demand (end-items or finished when these are needed, and in what quantities.goods) and dependent demand (raw materials, Normally, the master schedule is formed aftersubassemblies, components) (Stevenson, 2005). 2378 | P a g e
  3. 3. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-2387 disaggregating the aggregate planning which consists of demand for groups of end-items. Based on the customer orders, forecasts, and orders from warehouses to build up seasonal inventories, the demand for each particular end-item within the groups is specified. Following figure shows what a master schedule looks like.Item: X 1 2 3 4 5 6 7 8 500 700QUANTITY Figure2: Master schedule for end item A To ensure good master scheduling, the master scheduler (the human being) must Figure3: Bill of Material (product structure tree) for  Include all demands from product sales, product A Source: (Chase et al, 2006) warehouse replenishment, spares, and interplant requirements.  The Inventory Records  Never lose sight of the aggregate plan. Inventory records include information on the  Be involved with customer order promising. status of each item by time period or time buckets.  Be visible to all levels of management. This contains gross requirements, scheduled receipts, and expected amount on hand. It also includes other  Objectively trade off manufacturing. details for each item, such as supplier, lead time, and Marketing, and engineering conflicts. lot size policy. Changes due to stock receipts and  Identify and communicate all problems. withdrawals, cancelled orders, and similar events are (Chase et al, 2006) also recorded in this file (Stevenson, 2005).  Bill of materials MRP Processing A bill of materials contains a listing of all of MRP processing takes the end-item requirements the assemblies, subassemblies, parts, and raw specified by the master schedule and "explodes" them materials that are needed to produce one unit of a into time-phased requirements for assemblies, parts finished product. A product structure tree is useful in and raw materials using the bill of materials offset by illustrating how the bill of materials is used to lead times. The determination of the net requirements determine the quantities of each of the ingredients is the core of MRP processing. (requirements) needed to obtain a desired number of end items: The bill of materials (BOM) file contains the complete product description, listing not only the materials, Parts, and components but also the sequence in which the product is created. This BOM file is one of the three main inputs to the MRP program. (The other two are the master schedule and the inventory records file.) The BOM file is often called the product structure file or product tree because it shows how a product is put together. It contains the information to identify each item and the quantity used per unit of the item of which it is a part. Following figure shows the bill of material of end product A. Product A is made of two units of Part B and three units of Part C. Part B is made of one unit of Part D and four units of Part E. Part C is made of two units of Part F, five units of Part G, and four units of Part H. 2379 | P a g e
  4. 4. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-2387Gross requirement: Gross requirements are the total The MRP system has the ability to provideexpected demands for an item or raw material during management with a fairly broad range of outputs.each time period. These quantities are derived from These are often classified as primary reports, whichthe master production schedule or the planned-order are the main reports, and secondary reports, whichreleases of their immediate parents. are optional outputs.Scheduled receipts: Scheduled receipts are open Primary reportsorders (orders that have been placed) and are 1) Planned orders: indicating the amount andscheduled to arrive from vendors or elsewhere in the timing of future orders.pipeline by the beginning of a period. 2) Order releases: authorizing the execution ofProjected on hand: Projected on hand are the planned orders.expected amounts of inventory that will be on hand at 3) Changes: Revising planned orders, includingthe beginning of each time period: scheduled receipts changes of due dates or order quantities andplus available inventory from last period. cancellations of orders.Net requirements: Net requirement are the actual Secondary reportsamount needed in each time period. In addition to 1) Performance-control reports: evaluating thesubtracting projected inventory on hand from gross system operation by measuring deviationsrequirements, net requirements are sometimes from plans, including missed deliveries andadjusted to include safety stock and an allowance for stock outs, and by providing informationwaste. that can be used to assess cost performance.Planned-order receipts: Planned-order receipts are 2) Planning reports: including purchasethe quantities expected to be received by the commitments and other data that can bebeginning of the period. Under lot-for-lot ordering used to assess future material requirements.(lot size = 1), this quantity will equal net 3) Exception reports: calling attention to majorrequirements. Under lot-size ordering, the order size discrepancies such as late or overdue orders,must be in multiples of the lot size, thus this may excessive scrap rates, reporting errors, andexceed net requirements. Any excess is added to requirements for nonexistent parts.available inventory in the next time period.Planned-order releases: Planned-order releases are 1.1.3 Where MRP can be used?the planned amount to order in each time period; MRP is most valuable in industries where aequal planned-order receipts offset by lead times. number of products are made in batches using theThis amount generates gross requirements at the next same productive equipment.level in the assembly or production chain. When an The following table shows the examples of differentorder is executed, it is removed from "planned-order industry types and the expected benefit from MRP.releases" and entered under scheduled receipts. (Chase et al, 2006)MRP OutputIndustry type Examples Expected BenefitsAssemble-to-stock Combines multiple component parts into a High finished product, Which is then stocked in inventory to satisfy customer demand. Examples:- watches, tools, appliancesFabricate- to-stock Items are manufactured by machine rather than Low assembled from parts. These are standard stock items carried in anticipation of customer demand. Examples:- piston rings, electrical 2380 | P a g e
  5. 5. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-2387 switchesAssemble-to-order A final assembly is made from standard options High that the customer chooses. Examples: - trucks, generators, motorsFabricate-to-order Items are manufactured by machine to customer Low order. These are generally industrial orders. Examples:- bearings, gears, fastenersManufacture-to-order Items are fabricated or assembled completely to High customer specification, Examples: - turbine generators, Heavy machine toolsProcess Includes industries such as foundries, rubber medium and plastics. Specialty paper, chemicals, paint, drug, food processors.  Integrity of file data. 1.2 Pull type production systemMRP is most valuable to companies involved in The pull-type system drives productionsassembly operations and least valuable to those in based upon customer demand (as opposed tofabrication. One more point to be noted that MRP forecasted demand). This is a simplified controldoes not work well in companies that produce a low technique, which is designed to respond quickly tonumber of units annually. Especially for companies the demand changes. In pull-type system downstreamproducing complex, expensive products requiring of production system pulls the upstream of theadvanced research and design, experience has shown production system. When a customer order is placed,that lead times tend to be too long and too uncertain, it will be fulfilled from the finished productand the product configuration too complex. Such inventory. As soon as the finished product is pulledcompanies need the control features that network from this inventory, a signal (or kanban, containers,scheduling techniques offer. tags etc) is generated to trigger production of the upstream station in order to replenish the finished1.1.4 Requirements to Apply MRP product inventory. Similar procedures take place until MRP is most valuable in industries where a the first station, where it pulls raw material from thenumber of products are made in batches using the raw material storage. The pull-type system cansame productive equipment. It is often referred to as reduce WIP (work in process) inventory significantly.a planning and scheduling technique used for batch However, the system may not work well in anproduction. environment with medium to large demand variationIn order to implement and operate an effective MRP because there is not enough semi-finished inventorysystem, it is necessary to have: kept. This in turn may result in a significant  A computer and the necessary software backorder. In addition, the pull-type system often has programs to handle computations and longer delivery lead-time than that of the push-type maintain records; system, thus higher delivery late penalty costs.  Accurate and up-to-date master schedules, The increased responsiveness of this system bills of materials and inventory records; and to the changes in product demand makes it a better 2381 | P a g e
  6. 6. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-2387choice in certain cases over the Push type of improvement, a 60 percent reduction in scrap andproduction. In Pull type of production control, MPS rework, and a $ 22 million reduction in work-inis used only as a broad outline of the requirements for process inventory.resources at the different work centers. The major At Hewlett Packard‟s Vancouver Printerdifference with Push type, as regards the usage of division, inventory was reduced by 82 percent, floorMPS lies in the fact that MPS is used for this broad space requirements were reduced by 50 percent, andoutlining and not for the individual workstation scrap and rework costs were reduced by 30 percent.production rate. The JIT philosophy is the originalbasis of this system Philosophy of Just in Time Manufacturing the main aims of JIT philosophy is to1.2.1Just in Time (JIT) continuously eliminate waste and improveJIT Overview productivity .The essence of JIT is elimination of The JIT approach started to be developed at waste through elimination of non-value addedToyota by Taiichi Ohno, its vice president of activities in purchasing, manufacturing, distribution,manufacturing, and several of his colleagues since and manufacturing support activities of the1940s. At that time it was called the Toyota manufacturing process. JIT manufacturing is aProduction System (TPS). Just-In-Time was widely demand-pull system where products are producedapplied in Japan during the 1970s in the automotive when orders are received from customers and only inand electronics industries. The system gradually the quantities demanded by the customers.evolved and became a success during the 1980s when Just in Time production is defined as aToyota created impressively high quality, yet lower “philosophy that focuses attention on eliminatingpriced cars compared to their American rivals. waste by purchasing or manufacturing just enough of The Japanese are very sensitive to waste the right items just in time”.and inefficiency. They regard scrap and rework as It is a Japanese management philosophywaste and excess inventory as an evil because it takes applied in manufacturing which involves having theup space and ties up resources. The JIT methods right items of the right quantity in the right place andproduced high quality, low cost products that at the right time.permitted the Japanese to obtain world leadership in JIT is a philosophy of manufacturing basedthese markets. The Japanese success prompted many on planned elimination of all waste and continuousAmerican firms to adopt JIT methods. improvement of productivity. It encompasses the In addition JIT also emerged as a means of successful execution of all manufacturing activitiesobtaining the highest levels of usage out of limited required to produce a final product, from engineeringresources available. The JIT philosophy aims at to delivery and including all stages of conversionreducing the production batch sizes to expose the from raw materials onwards.production problems. Producing goods just in time The first basic principle involved in the JITeliminates the need for buffer stocks. "Making (or production approach is the elimination of waste. In abuying in case of JIT purchases) right quantity at the JIT system, waste is defined as anything associatedright time at the right place" is another way of with the production process that does not add value todefining the JIT systems. When compared with the the final product. Thus, waste includes qualityMRP-ll system, which emphasizes on planning to defects, inventories of all kinds, time spent to moveanticipate problems, JIT stresses at execution to material and time spent setting up machines. If theidentify problems. To achieve low-cost, high quality implications of managing the reduction in waste forand on-time production, this system removes stock the categories mentioned above are analyzed, itaccumulations between various production stages becomes obvious why JIT is involved in all aspects Just-In-Time production techniques were of the management of the production process.pioneered by the Toyota Motor Company and were The second principle of JIT productionwidely applied in Japan during the 1970s in the involves the management of people. The JITautomotive and electronics industries. The JIT philosophy assumes that people are capable andmethods produced high quality, low cost products willing to take on more responsibility. People willthat permitted the Japanese to obtain world leadership respond to the critical needs of the organization ifin these markets. The Japanese success prompted they have the opportunity and authority for helping tomany American firms to adopt JIT methods. Major solve production problems. If defective parts areimprovements have been reported from these efforts. being produced, and individual can stop theFor example, production line. Once stopped, everyone working on Harley Davidsons JIT/TQC efforts from the line has the responsibility to solve the problem.1981-1986 resulted in a 30 percent productivity 2382 | P a g e
  7. 7. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-23871.2.2 Goals of JIT operators for different kind of jobs and  Increasing the organization‟s ability to system adaptability to market function etc. complete with rival firms and remain  There is no flexibility-only „first come first competitive over the long run. JIT allows served‟ principle is applied by organization to develop an optimal process. manufacturing items in order of releasing  Increasing the degree of efficiency within kanbans. the production process. Efficiency will  There is no safety stock to offset inaccurate concern itself with achieving greater levels demand forecast. of productivity while minimizing the JIT production is effective only when the daily associated cost of production. demands are fairly stable.  Reducing the level of wasted materials, time and effort involved in the production 2. Literature review:- process. The literature review is divided into the following  Identifying and responding to consumer parts. They are needs.  Review related to MRP4 Benefits of JIT  Review related to JITThere are many advantages for a business to adopt a  Review related to integrated MRP- JITJIT technique: production system  Improvement in the relationship with suppliers 2.1 Review related to MRP-  Multi skilled employees are identified and MRP has been a very popular and widely used used in practice, it has attracted many researchers‟  Reducing the manufacturing and production interests. For example lot sizes Whybark and Williams (Whybark and  Striking at the core of any problems Williams, 1976) considered material requirement associated with manufacturing processes planning problem under uncertainty in 1976. They  Responsive to the consumer needs developed a model to show the way in which MRP  Eliminating wastages of various kinds such systems reveal preference for using either safety as inventory waste from the stock or safety time, depending on the category of Processes, time waste, waste arising out of uncertainty to be buffered. According to simulation over production etc. experiments, when exists timing uncertainty the  Preventing any sort of breakdown by concept of safety time instead of safety stock is maintaining the equipments during the idle preferable. When quantity uncertainty is involved, time of machinery and workers higher service levels are achieved by the use of safety stocks.  Less inventory of raw material. Two basic sources of uncertainty affect directly an  Improving quality by aiming at zero defects. MRP system performance: demand and supply uncertainty. In either of the two scenarios,1.2.5 Limitations of JIT uncertainty may exist in quantity and/or in timing.  Cultural differences have been cited as Melnyk and Piper (Melnyk and Piper, 1985) possible limitation of JIT. The benefit investigated the effect of different lot sizing rules on associated with JIT may be culturally bound lead-time error. They examined the interaction and somewhat limited to Japanese between lot sizing rules and lead-time estimation environment. methods. They believed that lot size and lead-time  Loss of individual autonomy is another are two inter dependent functions. They found that possible shortcoming of JIT. Reduced cycle PLT (planned lead time) inflation influences lot size time forces the workers to adjust effectiveness and vice-versa. immediately to changes in demand, Melnyk and Piper proposed a forecast significantly reducing the idle time of the method for the lead time which is issued from the workers resulting in greater amount of stress used methods for random demand: and pressure placed upon the workers to Planned lead time = perform. = lead time forecast + safety lead time  The success of JIT production depends upon = lead time mean + k lead time standard deviation. co-operation between employer-employee, Past studies for improving the performance daily workstation rotation, training of of MRP can be divided into two types; those for 2383 | P a g e
  8. 8. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-2387improving the part explosion process and those for boost in 1972 because the American Production andreducing MRP nervousness. These issues are Inventory Control Society (APICS) launched itsinterrelated, and the MRP nervousness used to be the “MRP Crusade” to promote its use.key problem to be resolved in MRP. Most previousstudies attempted to solve this problem by the lot- 2.1.1 Major problem of MRPsizing method. However, the lot-sizing method often The general theme of MRP is to receive theneeds to be tailored to the specific manufacturing right part, in the right quantity, and at the right time.environment involved and there is no guarantee that The first major problem of MRP is the need to setan optimal solution can be found. planned lead time. Planned lead time represents the Karmarkar (Karmarkar et al., 1985) amount of time allowed for orders to flow throughillustrated the impact of lot size on queues. They the production facility. It plays an important role inintuitively found that big lot size causes large queue the phasing principle of MRP, that is, the plannedbuild up. They also found that initially lot size order receipt date is offset by the planned lead time.reduction causes queue reduction but eventually the Huge (Huge, 1979) found that the waitingqueue started to build up because of an increased time in queue can represent as much as 90 to 95% ofnumber of setups. They also suggested the the lead time. Hence, lead time is very muchconventional objective function modification for determined by how long it takes to obtain thefinding the optimal lot size. They argued that an required capacity, in other words, the congestioninvestment associated with work-in-process (WIP) is level of the shop. Therefore, setting optimal plannedthe opportunity cost and lot size models should lead times for MRP is not a simple task.incorporate the WIP cost in their objective function St. John (St. John, 1985) investigated thein order to capture the implicit effect of lot size on cost of inflated planned lead times for the multi-lead-time. product, multi-stage environment, where MRP Lee and Adam (Lee and Adam, 1986) system was employed, He found that total costs wereconducted a simulation study to examine two significantly higher when the planned lead time wasdimensions of forecast error - standard deviation and set to be long, Therefore, any deviation of thebias. They found that standard deviation is relatively planned lead time from the actual lead time canless important in terms of the magnitude of the total create undesirable effects.cost impact, which includes inventory carrying cost, The major issue in MRP deals with thesetup cost and end item shortage cost. Their results question: how to decide the order quantity? This issuggest that higher forecast error level may not result generally called the lot-sizing decision,in higher total cost, which seems to contradict what The second major issue of MRP is that itwe intuitively believe. does not produce a workable schedule for the shop- Mohan and Ritzman (Mohan and Ritzman, floor. The planned order release and the planned1998) investigated the impact of planned lead-time order receipt merely specify the start date and finishon MRP system performances. They used four date of an order. Hence, MRP cannot determine thedifferent levels of planned lead-time. At each level, exact time period and workstation for processingthey used different magnitudes of inflation. They each operation,concluded that planned lead-time does affect The last major problem of MRP is capacity planning,customer service, but it has a lesser effect on WIP According to Chase & Aqnilano (Chase & Aquilano,than that of lot size. They did not consider the 1995) When MRP is employed to perform capacityinterdependent nature of both lot size and planned requirements planning, it assumes that the resourcelead-time. capacity (machine time) is utilized at the period that a Guide and Srivastava (Guide and Srivastava, job is released or at the middle period between2000) reviewed different buffering techniques used planned order release and planned order receipt datesfor tackling the uncertainty in MRP systems. Theirstudy report indicates that only a few research efforts 2.1.2 Problems with MRP implementationhave been made in the area of lead-time uncertainty Many sources state that problems associatedin MRP systems. Most of the research has tackled with MRP systems lie, to some degree, withlead-time uncertainty using the safety lead-time organizational and behavioral factors. Among thefactor and they have all used independent approach causes cited for MRP system failures are thefor estimating lot-size and planned lead-time. following: According to Hopp and Spearman (Hopp 1) Lack of top management commitment - “Part ofand Spearman, 2008) MRP is one of the earliest the blame for the lack of top managementcomputerized production scheduling approaches. commitment may be MRP‟s image. It sounds like aAlthough it started slowly, MRP got an extensive manufacturing system rather than a business plan. 2384 | P a g e
  9. 9. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-2387However, an MRP system is used to plan resources center. The result is that the upstream work centersand develop schedules. Also, a well-functioning will not produce unless there is a demand or pullschedule can use the firm‟s assets effectively, thus from its customer (downstream work center). On theincreasing profits. MRP should be accepted by top other hand, a push system, driven by the upstreammanagement as a planning tool with specific workstation, pushes out the parts (that later becomereference to profit results” (Chase & Aquilano,1995). work-in process inventory) without regard to the demand of its downstream workstation. The2) Failure to recognize that MRP is only a excessive WIP inventory is one of the majorsoftware tool- that needs to be used correctly to disadvantages of push systems.adapt the organization and its processes to exploit the One of the major requirements for JITsystem‟s capabilities. “MRP proponents overdid production is a stable environment so as to obtain athemselves in selling the concept. MRP was level schedule. A JIT production system requires apresented and perceived as a complete and standalone uniform flow of goods through the system to achievesystem to run a firm, rather than as part of the total a good coordination of the different operations andsystem” (Chase & Aquilano, 1995) the movement of goods and materials from the supplier to the final output. Therefore, production3) Insufficient user training and education - In schedules must be fixed over a time horizon in ordernearly every study conducted and in many published for production and purchasing schedules to becases, the lack of training or understanding is established. Once plans are set, they generally are notconsidered a major barrier to MRP implementation. allowed to change. Therefore, Kanban system is moreSum and Yang (Sum and Yang, 1993) identified that suitable to companies that produce repetitivethe lack of MRP expertise, training, and education products. In fact, the simplicity principle employed inwere major problems facing MRP implementers. JIT reinforces the level schedule idea. Furthermore,There are several published books about user training JIT is more of a planning concept rather than afor Management Information Systems. The need to planning and scheduling technique. Hence, it doesadapt employees to their MRP systems definitely not generate a formal shop-floor schedule.exists. 2.3 Literature review related to integrated MRP-4) Lack of technical expertise - Not only is there a JIT production systemneed to improve user training techniques and general A number of research works have appearedunderstanding of MRP systems, there is also a which discuss the possible integration of MRP-JIT.definite lack of technical expertise to provide the Nonetheless, most of them are focused on theleadership needed to implement the systems. Not conceptual level of JIT philosophy and are moreonly would the technical experts need to be familiar concerned with combining rather than integratingwith the operational needs of daily production, the MRP and JIT.system integrators would also need to understand Olhager and Ostlund(Olhager and Ostlund,how the computer software system can be built to 1990) proposed a three types of push- pull integratedhandle the production needs. Increasingly, the model in relation toadvanced  customer order point,MRP-type systems are seeking to integrate concepts  bottleneck resources, andof Just-In-Time (JIT) production into the computer  The product structure.applications system. These approaches were applied to a medium-sizedMajor problem of JIT packaging company. The results included cycle time JIT production can be viewed in a colloquial reduction to one week, inventory decrease by 75%fashion as consisting of Big JIT and Little JIT and sales turnover increase by 10–15%.(Chase & Aquilano, 1995) [3]. Big JIT is more of a Flapper et al. (Flapper et al. 1991) theymanagement philosophy that encompasses every present a three-step framework for embedding JITaspect of a firms production activities. On the other into an MRP environment. This method will allowhand, Little JIT is focused on Kanban pull JIT to operate within MRP. The benefits includeproduction scheduling and control method. Here lower costs, shorter lead times, better quality, lowerLittle JIT used as the production and inventory transportation cost, and reductions in floor space.control tools in JIT. The Kanban pull system suggests They propose one of the most rigorous frameworksthat production should be triggered by a pull signal for integrating MRP and JIT. Their three-stepfrom a downstream work center when it has demand framework makes use of MRPs back flushing andfor component parts. That is, the downstream work phantom features, and allows JIT principles to becenter serves as a customer for its upstream work 2385 | P a g e
  10. 10. Vaibhav Jha / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 www.ijera.com Vol. 2, Issue4, July-August 2012, pp.2377-2387utilized to the fullest extent. They suggest that MRP pull stations start at this buffer storage down to theis an ideal mechanism for planning and control final packaging stations. Based on their study withpropose, while JIT is the best tool for reducing cost computer-generated data, the results are in favor ofand lead times. By taking advantage of the two, one the hybrid system.can obtain the best of both worlds. The essence of the Geraghty and Heavey (Geraghty andproposed framework is to incorporate the pull Heavey, 2005) defined that "A hybrid productionelement of operations scheduling in JIT into MRP. It system could be characterized as a production systemis generally agreed among researchers that MRP is a that combines elements of the two philosophies inpush system. However, it is very important to make order to minimize inventory and unmask flaws in thethe distinction between materials (or parts) planning system, while maintaining the ability of the system tolevel and operations scheduling levels when we say satisfy demand".MRP is a push system. Hybrid systems can be classified into two categories: Hodgson and Wang (Hodgson and Wang, vertically integrated hybrid system (VIHS) or1991) developed a Markov Decision Process model horizontally integrated hybrid system (HIHS).for HIHS (horizontally integrated hybrid system). Cochran and Kaylani (Cochran and Kaylani 2008),The model solved problems using both dynamic propose a horizontally integrated hybrid productionprogramming and simulation for several production system with multiple part types that saves productionstrategies, including pure pull, pure push, and costs compared to either pure push or pure pull. Inintegrated ones. They indicated that the pure pull their paper, Cochran and Kaylani developed a geneticstrategy was a group of decentralized controllers algorithm (GA) to optimize the hybrid productionwithout any real-time coordination. system by locating points of integration, and Later, Hodgson and Wang (Hodgson and determining the optimal values of safety stocks forWang, 1991) focused on the local goal of each the push part and number of Kanbans for the pulldecentralized controller, which was to satisfy the part.local demand subject to the available local supply, Problem Formulation:-instead of paying attention to the global goal of The main limitation of MRP is the integritymeeting end-users‟ demand while saving inventory of the data. If there are any errors in the inputs ofexpenses. They conclude that a superior strategy MRP then the output will also be incorrect. In casecontaining a group of decentralized controllers with a of JIT concept, JIT only works in stable demands. JITcentralized coordinator. Individual controllers had the concept does not allow to keep inventory, thus it isability to adjust their inventory situations to meet the not suitable for fluctuate demands.local demand. But their material supply was Both MRP and JIT have benefits, MRP is mostcontrolled, in part, by the central computer. suitable for planning and scheduling of the Cochran and Kim (Cochran and Kim, 1998) production system while JIT is most suitable forcategorize the combination of a push/pull executing and controlling the production system withmanufacturing system into vertically and horizontally minimum inventories.integrated hybrid systems. Vertically integrated Objective of Study:-hybrid systems consist of two levels, an upper level 1. To study the material requirement planningpush-type production ordering system and a lower (MRP) systems in manufacturing industry.level pull-type production system. For this type of 2. To study the integrated system of MRP-JIThybrid system, material requirement planning (MRP) system.is normally applied for production and operation Proposed methodology:-planning, while just-in-time (JIT) is used for shop 1. To identifying the best practices related tofloor control and execution. This method enables the MRP system in manufacturing industry.production system to keep the inventory low while 2. To identifying the best practices related tostill reacting fast enough when fluctuation of demand JIT system in manufacturing industry.occurs. 3. To explore the possible integrated MRP-JIT Beamon and Bermudo (Beamon and system in practice.Bermudo, 2000) suggest a hybrid push/pull algorithmto reduce costs of inventory and at the same time, 6. References:-maintain a high level of customer service. The 1. Beamon, B. M. and Bermudo, J. M. (2000),” Aalgorithm developed is for a multi-line, multi-stage hybrid push/pull control algorithm for multi-assembly-type production system. stage, multi-line production system”.The push philosophy is applied from the raw material Production Planning & Control, vol.11, no.4,storage until the components complete processing pp349-356.and go to buffer storage at the end of each line. The 2386 | P a g e
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