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Close Loop MRP

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MRP II – Planning to Execution from Long Range Planning, Intermediate Range Planning to Short Term Planning & Execution

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Close Loop MRP

  1. 1. Close Loop MRP MRP II – Planning to Execution Anand Subramaniam
  2. 2. <ul><li>“ We used to have a lot of questions to which there were no answers. Now with the computer we have lots of answers to which we haven’t thought up the questions.” </li></ul><ul><ul><li>- Peter Ustinov </li></ul></ul>
  3. 3. Highlights <ul><li>Long Range Planning </li></ul><ul><li>Intermediate Range Planning </li></ul><ul><li>Short Term Planning </li></ul>
  4. 4. Planning Levels
  5. 5. Long Range Planning
  6. 6. Long Range Planning <ul><li>This involves three functions: </li></ul><ul><ul><li>Resource Planning </li></ul></ul><ul><ul><li>Aggregate Planning </li></ul></ul><ul><ul><li>Forecasting </li></ul></ul><ul><li>Time horizon from six months to five years </li></ul><ul><li>Frequency for re-planning varies from once per month, to once per year, with two to four times per year being typical </li></ul><ul><li>The degree of detail is at the part family level </li></ul>
  7. 7. Forecasting <ul><li>To predict future demands </li></ul><ul><li>Long-range fore­casting is important to determining the capacity, tooling and resource requirements </li></ul><ul><li>Short-term forecasting converts a long-range forecast of part families to short-term fore­casts of individual end items </li></ul><ul><li>Both kinds of forecasts are input to-the intermediate-level function of demand management </li></ul>
  8. 8. Resource Planning <ul><li>Process of determining capacity requirements over the long term </li></ul><ul><li>Decisions such as whether to build a new plant or to expand an existing one are part of the capacity planning function </li></ul><ul><li>An important output of resource planning is projected available capacity over the long-term planning horizon, which is fed as a parameter to the aggregate planning function </li></ul>
  9. 9. Aggregate planning <ul><li>Used to determine levels of production, staffing, inventory, overtime etc over the long term </li></ul><ul><li>The level of detail is typically by month and for part families </li></ul><ul><li>To determine whether to build up inventories in anticipation of increased demand or &quot;chase&quot; the demand by varying capacity using overtime, or do some combination of both </li></ul><ul><li>Optimisation techniques such as linear programming are often used to assist the aggregate planning process </li></ul>
  10. 10. Intermediate Range Planning
  11. 11. Intermediate Planning <ul><li>Demand Management </li></ul><ul><li>Rough-cut Capacity Planning (RCCP) </li></ul><ul><li>Master Production Scheduling (MPS) </li></ul><ul><li>Material Requirements Planning (MRP) </li></ul><ul><li>Capacity Requirements Planning (CRP) </li></ul>
  12. 12. Demand Management <ul><li>The process of converting the long-term aggregate forecast to a detailed forecast while tracking individual customer orders </li></ul><ul><li>The output of the demand management is a set of actual customer orders plus a forecast of anticipated orders </li></ul><ul><li>As time progresses, the anticipated orders should be &quot;consumed&quot; by actual orders </li></ul>
  13. 13. ATP <ul><li>Demand management is accomplished with a technique known as available to promise (ATP) </li></ul><ul><li>This allows the planner to know which orders on the MPS are already committed and which are available to promise to new customers </li></ul><ul><li>ATP combined with a capacity-feasible MPS, facilitates negotiation of realistic due dates </li></ul>
  14. 14. ATP (Contd.) <ul><li>If more orders than expected are received, so that quoted lead times become excessive, additional capacity (e.g., overtime) might be required </li></ul><ul><li>On the other hand, if fewer than expected orders arrive, sales might want to offer discounts or some other incentives to increase demand </li></ul><ul><li>In either case, the forecast and possibly the aggregate plan should be revised </li></ul>
  15. 15. Master Production Schedule (MPS) <ul><li>It takes the demand forecast along with the firm orders from the demand management and using aggregate capacity limits, generates an anticipated build schedule at the parent level </li></ul><ul><li>These are the &quot;demands&quot; (i.e., part number, quantity, and due date) used by MRP </li></ul><ul><li>It contains an order quantity in each time bucket for every parent demand along with planning date </li></ul>
  16. 16. Rough-cut capacity planning (RCCP) <ul><li>Used to provide a quick capacity check of a few critical resources to ensure the feasibility of the MPS </li></ul><ul><li>It is more detailed than aggregate planning, RCCP is less detailed than capacity requirements planning (CRP), which is another tool for performing capacity checks after the MRP processing </li></ul><ul><li>RCCP makes use of a bill of resources for each parent item on the MPS </li></ul>
  17. 17. Capacity requirements planning (CRP) <ul><li>Provides a more detailed capacity check on MRP-generated production plans than RCCP </li></ul><ul><li>Necessary inputs include all planned order releases, existing WIP positions, routing data, as well as capacity and lead times for all process centers </li></ul>
  18. 18. Short Term Planning
  19. 19. Short Term Plans <ul><li>The plans generated in the long and intermediate are implemented via job release, job dispatching and input / output control </li></ul>
  20. 20. Job Release / Work Orders <ul><li>Converts planned order releases to scheduled receipts </li></ul><ul><li>One of the important functions of job release is allocation when there is an insufficient quantity on hand </li></ul><ul><li>By allocating parts to one job or another, the job release function can rationalise any conflicts </li></ul>
  21. 21. Job Dispatching <ul><li>Develop a rule for arranging the queue in front of each workstation that will maintain due date integrity while keeping machine utilisation high and manufacturing times low </li></ul>
  22. 22. Input / Output Control <ul><li>Monitor the WIP level in each process center </li></ul><ul><li>If the WIP goes above or below a certain level, where the current release rate is too high / too low, then it will reduce / increase it </li></ul><ul><li>If WIP stays between these control levels, the release rate is correct for the current conditions </li></ul>
  23. 23. <ul><li>“ The secret of success is to know something nobody else knows.” </li></ul><ul><ul><li>- Aristotle Onassis </li></ul></ul>
  24. 24. <ul><li>Good Luck </li></ul><ul><li>http://www.linkedin.com/in/anandsubramaniam </li></ul>

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