15 mrp

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  • 15 mrp

    1. 1. POM - J. GalvánPOM - J. Galván 11 PRODUCTION ANDPRODUCTION AND OPERATIONSOPERATIONS MANAGEMENTMANAGEMENT Ch. 15: MaterialCh. 15: Material Requirements Planning (MRP)Requirements Planning (MRP)
    2. 2. POM - J. GalvánPOM - J. Galván 22  Distinguish dependent fromDistinguish dependent from independent demand inventoryindependent demand inventory  Define material requirements planningDefine material requirements planning  Explain the benefits of MRPExplain the benefits of MRP  Identify the requirements of MRP, DRP,Identify the requirements of MRP, DRP, and ERPand ERP  Explain the inputs & outputs of MRPExplain the inputs & outputs of MRP  Compute order releasesCompute order releases Learning ObjectivesLearning Objectives
    3. 3. POM - J. GalvánPOM - J. Galván 33 Item Materials With Independent Demand Materials With Dependent Demand Demand Source Company Customers Parent Items Material Type Finished Goods WIP & Raw Materials Method of Estimating Demand Forecast & Booked Customer Orders Calculated Planning Method EOQ & ROP MRP Dependent versus IndependentDependent versus Independent DemandDemand
    4. 4. POM - J. GalvánPOM - J. Galván 44 Inputs to theInputs to the Production PlanProduction Plan Production Plan Marketing Customer Demand Engineering Design Completion Management Return on Investment Capital Human Resources Manpower Planning Procurement Supplier Performance Finance Cash Flow Production Capacity Inventory
    5. 5. POM - J. GalvánPOM - J. Galván 55 Requirements for Effective Use ofRequirements for Effective Use of Dependent Demand Inventory ModelsDependent Demand Inventory Models Effective use of dependent demandEffective use of dependent demand inventory models requires that theinventory models requires that the operations manager know the:operations manager know the: • master production schedulemaster production schedule • specifications or bills-of-materialspecifications or bills-of-material • inventory availabilityinventory availability • purchase orders outstandingpurchase orders outstanding • lead timeslead times
    6. 6. POM - J. GalvánPOM - J. Galván 66 The Planning ProcessThe Planning Process Production Plan Execute Material Plans Master Production Schedule Material Requirements Plan Capacity Requirements Plan Execute Capacity Plans Realistic??No Yes
    7. 7. POM - J. GalvánPOM - J. Galván 77 Typical Level for theTypical Level for the Master ScheduleMaster Schedule  AA customer ordercustomer order in a job shopin a job shop (process focused/make to order)(process focused/make to order) companycompany  ModulesModules in a repetitive (assemble-to-in a repetitive (assemble-to- stock) companystock) company  AnAn end itemend item in a continuous (productin a continuous (product focused/make to stock) companyfocused/make to stock) company
    8. 8. POM - J. GalvánPOM - J. Galván 88  List of components & quantitiesList of components & quantities needed to make productneeded to make product  Provides product structure (tree)Provides product structure (tree) • Parents: Items above given levelParents: Items above given level • Children: Items below given levelChildren: Items below given level  Shows low-level codingShows low-level coding • Lowest level in structure item occursLowest level in structure item occurs • Top level is 0; next level is 1 etc.Top level is 0; next level is 1 etc. Bill-of-MaterialBill-of-Material
    9. 9. POM - J. GalvánPOM - J. Galván 99 Bicycle(1) P/N 1000 Handle Bars (1) P/N 1001 Frame Assy (1) P/N 1002 Wheels (2) P/N 1003 Frame (1) P/N 1004 Bill-of-MaterialBill-of-Material Product Structure TreeProduct Structure Tree
    10. 10. POM - J. GalvánPOM - J. Galván 1010 Time-Phased Product StructureTime-Phased Product Structure 1 2 3 4 5 6 7 8 D G F E C E D B A 2 weeks 1 week 3 weeks 2 weeks 1 week 1 week 2 weeks 1 week 2 weeks to produce Start production of D Must have D and E completed here so production can begin on B
    11. 11. POM - J. GalvánPOM - J. Galván 1111 1 2 3 4 5 Gross Requirements 2 20 25 15 Scheduled Receipts 5 30 Available 25 23 33 33 8 Net Requirements 7 Planned Order Receipts 7 Planned Order Releases 7  Manufacturing computer informationManufacturing computer information systemsystem  Determines quantity & timing ofDetermines quantity & timing of dependent demand itemsdependent demand items Material RequirementsMaterial Requirements Planning (MRP)Planning (MRP)
    12. 12. POM - J. GalvánPOM - J. Galván 1212  Computer systemComputer system  Mainly discrete productsMainly discrete products  Accurate bill-of-materialAccurate bill-of-material  Accurate inventory statusAccurate inventory status • 99% inventory accuracy99% inventory accuracy  Stable lead timesStable lead times MRP RequirementsMRP Requirements
    13. 13. MRP PURPOSEMRP PURPOSE • Coordination of Production and InventoryCoordination of Production and Inventory in large, multi-stage production systemsin large, multi-stage production systems • Capacity planning, scheduling, supplierCapacity planning, scheduling, supplier coordinationcoordination • Timely dissemination of informationTimely dissemination of information • Synchronized production and procurementSynchronized production and procurement • Central engineering and logistic databaseCentral engineering and logistic database (Central element of the ERP system)(Central element of the ERP system)
    14. 14. MRP PROBLEMSMRP PROBLEMS • Deterministic model • Large data requirements and GIGO (Garbage in garbage out) • Self-fulfilling lead-times, so then what happens if fulfilment is not accomplished? • Difficulty and cost of installation and maintenance • Centralized command and control mindset
    15. 15. POM - J. GalvánPOM - J. Galván 1515  Increased customer satisfaction due to meeting deliveryIncreased customer satisfaction due to meeting delivery schedulesschedules  Faster response to market changesFaster response to market changes  Improved labor & equipment utilizationImproved labor & equipment utilization  Better inventory planning & schedulingBetter inventory planning & scheduling  Reduced inventory levels without reduced customerReduced inventory levels without reduced customer serviceservice MRP BenefitsMRP Benefits
    16. 16. Variables in MRPVariables in MRP o Master Schedule -WHENMaster Schedule -WHEN o Bills of Material -WHATBills of Material -WHAT o Stocks & Work in Progress (WIP) – HOWStocks & Work in Progress (WIP) – HOW MUCHMUCH o Lead-times – WHEN TO HAVE AVAILABLELead-times – WHEN TO HAVE AVAILABLE o Work orders / schedules – WHAT TO DOWork orders / schedules – WHAT TO DO o Purchase orders / schedules –WHEN TOPurchase orders / schedules –WHEN TO ORDERORDER o Yields – WHAT IS LOSTYields – WHAT IS LOST o Working daysWorking days / times - CALENDAR/ times - CALENDAR
    17. 17. POM - J. GalvánPOM - J. Galván 1717 Structure of the MRP SystemStructure of the MRP System MRP by period report MRP by date report Planned orders report Purchase requirements Exception reports MRP Programs Master Production Schedule BOM Lead Times (Item Master File) (Bill-of-Material) Inventory Data Purchasing data
    18. 18. POM - J. GalvánPOM - J. Galván 1818 Forecast & Firm Orders Material Requirements Planning Aggregate Production Planning Resource Availability Master Production Scheduling Shop Floor Schedules Capacity Requirements Planning Realistic? modify CRP, MRP, or MPSmodify CRP, MRP, or MPS YesYes MRP and The ProductionMRP and The Production Planning ProcessPlanning Process NoNo
    19. 19. POM - J. GalvánPOM - J. Galván 2020  Shows items to be producedShows items to be produced • End item, customer order, moduleEnd item, customer order, module  Derived from aggregate planDerived from aggregate plan Master Production ScheduleMaster Production Schedule
    20. 20. POM - J. GalvánPOM - J. Galván 2121 Item/Week Oct 3 Oct 10 Oct 17 Oct 24 Drills 300 200 310 300 Saws 300 450 310 330  Shows items to be producedShows items to be produced • End item, customer order, moduleEnd item, customer order, module  Derived from aggregate planDerived from aggregate plan  ExampleExample Master Production ScheduleMaster Production Schedule
    21. 21. POM - J. GalvánPOM - J. Galván 2222 MRP DynamicsMRP Dynamics  Supports “replanning”Supports “replanning” • Problem with system “nervousness”Problem with system “nervousness”  ““Time fence” - allows a segment of the masterTime fence” - allows a segment of the master schedule to be designated as “not to beschedule to be designated as “not to be rescheduled”rescheduled”  ““Pegging” - tracing upward in the bill-of-Pegging” - tracing upward in the bill-of- materials from the component to the parentmaterials from the component to the parent itemitem  ManagerManager cancan react to changes, doesn’t meanreact to changes, doesn’t mean he/she shouldhe/she should
    22. 22. POM - J. GalvánPOM - J. Galván 2323 MRP and JITMRP and JIT  MRP - a planning and schedulingMRP - a planning and scheduling technique with fixed lead timestechnique with fixed lead times  JIT - a way to move materialJIT - a way to move material expeditiouslyexpeditiously  Integrating the two:Integrating the two: • Small bucket approach and back flushingSmall bucket approach and back flushing • balanced flow approachbalanced flow approach
    23. 23. POM - J. GalvánPOM - J. Galván 2424 Extensions of MRPExtensions of MRP  Closed loop MRPClosed loop MRP  Capacity planning - load reportsCapacity planning - load reports  MRP II - MaterialMRP II - Material ResourceResource PlanningPlanning  Enterprise Resource PlanningEnterprise Resource Planning
    24. 24. POM - J. GalvánPOM - J. Galván 2525 Extensions of MRPExtensions of MRP Closed Loop MRPClosed Loop MRP Dispatch List Is specific capacity adequate? Is average capacity adequate? Material Requirements (detailed) Capacity Requirements (detailed) Input/Output Desired Master Production Schedule Realistic? Priority Control Capacity PlanningPriority Planning Capacity Control Resource Planning First Cut Capacity Production Plan NoNo No Yes Yes
    25. 25. POM - J. GalvánPOM - J. Galván 2626 Extensions of MRPExtensions of MRP Capacity PlanningCapacity Planning  Tactics for smoothing the load and minimizing the impactTactics for smoothing the load and minimizing the impact of changed lead time include:of changed lead time include: • Overlapping - reduces the lead time, entails sendingOverlapping - reduces the lead time, entails sending pieces to the second operation before the entire lot haspieces to the second operation before the entire lot has completed the first operationcompleted the first operation • Operations splitting - sends the lot to two differentOperations splitting - sends the lot to two different machines for the same operationmachines for the same operation • Lot splitting - breaking up the order and running part of itLot splitting - breaking up the order and running part of it ahead of the scheduleahead of the schedule
    26. 26. POM - J. GalvánPOM - J. Galván 2727 Extensions to MRPExtensions to MRP Enterprise Resource PlanningEnterprise Resource Planning MRP II with ties to customers andMRP II with ties to customers and supplierssuppliers
    27. 27. POM - J. GalvánPOM - J. Galván 2828 MRP in ServicesMRP in Services  Can be used when demand forCan be used when demand for service or service items is directlyservice or service items is directly related to or derived from demandrelated to or derived from demand for other servicesfor other services • restaurant - rolls required for each mealrestaurant - rolls required for each meal • hospitals - implements for surgeryhospitals - implements for surgery • etc.etc.
    28. 28. POM - J. GalvánPOM - J. Galván 2929 Distribution Resource PlanningDistribution Resource Planning  DRP requires:DRP requires: • Gross requirements, which are the sameGross requirements, which are the same as expected demand or sales forecastsas expected demand or sales forecasts • Minimum levels of inventory to meetMinimum levels of inventory to meet customer service levelscustomer service levels • Accurate lead timesAccurate lead times • Definition of the distribution structureDefinition of the distribution structure

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