Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Material Requirement
Planning (MRP1)
What is MRP?
 Computerized Inventory Control
 Production Planning System
 Management Information System
 Manufacturing...
What is MRP? (cont)
 This is the most comprehensive approach to
manufacturing inventory and other dependents
which demand...
What is MRP do ?
 The MRP system determines item-by-item, what is to
be processed and when, as well as what is to be
manu...
When to use MRP
 Job Shop Production
 Complex Products
 Assemble-to-Order Environments
 Discrete and Dependent Demand ...
What can MRP do?
 Reduce Inventory Levels
 Reduce Component Shortages
 Improve Shipping Performance
 Improve Customer ...
What can MRP do?(contd)
 Improve Communication
 Improve Plant Efficiency
 Reduce Freight Cost
 Reduction in Excess Inv...
Three Basic Steps of MRP
 Identifying Requirements
 Running MRP – Creating the Suggestions
 Firming the Suggestions
Step 1: Identifying the Requirements
 Quantity on Hand
 Quantity on Open Purchase Order
 Quantity in/or Planned for Man...
Step 1: Important Information
MRP is…..
 Company Sensitive
 Location Sensitive
 Date Sensitive
Step 2: Running MRP – Creating the
Suggestions
 Critical Items
 Expedite Items
 Delay Items
Step 3: Firming the Suggestions
 Manufacturing Orders
 Purchasing Orders
 Various Reports
Overview of the MRP System
Product
Structure
File
Master
Production
Schedule
Inventory
Master File
Material
Requirements
P...
MRP Inputs
 Product Structure File
 Master Production Schedule
 Inventory Master File
Product Structure File
 Bill of Materials:
 It is a materials list that provides information
useful to reconstruct the m...
Bill-of-Material
Product Structure Tree
Bicycle(1)
P/N 1000
Handle Bars (1)
P/N 1001
Frame Assembly
(1) P/N 1002
Wheels (2...
Master Production Schedule
 Schedule of Finished Products
 Represents Production, not Demand
 Combination of Customer O...
Inventory Master File
 On-Hand Quantities
 On-Order Quantities
 Lot Sizes
 Safety Stock
 Lead Time
 Past-Usage Figur...
MRP Process
Item:
Low-Level Code:
Lot Size:
Lead Time
PD 1 2 3 4 5
Gross
requirement
Scheduled
receipts
Projected on
hand
...
Terms Defined
 Item – name or number for the item being scheduled
 Low-Level Code – the lowest level of the item on the ...
Terms Defined
 Gross Requirements – demand for an item by time period
 Scheduled Receipts – material already ordered
 P...
Example of the MRP Process
Item:
PD 1 2 3 4 5
Gross
requirement 10 15 25 25 30
Scheduled
receipts 25
Projected
on hand 20
...
Example of the MRP Process
Item
PD 1 2 3 4 5
Gross
requiremen
t
10 15 25 25 30
Scheduled
receipts 25
Projected
on hand 20 ...
Aggregate
Production Plan
Marketing
Customer
Demand
Engineering
Design
Completion
Management
Return on
Investment
Capital
...
Production Plan
Execute Material
Plans
Master Production
Schedule
Material
Requirements
Plan
Capacity
Requirements
Plan
Ex...
MRP Outputs
Manufacturing Orders
Purchasing Orders
Various Reports
Hubbell Lighting Case
Before MRP Implementation
Less than 75% of orders completed on time
After MRP Implementation
97% of ...
Summary of
MRP
MRP is a…..
Computerized Inventory Control
Production Planning System
that…..
Schedules Component Items as ...
Upcoming SlideShare
Loading in …5
×

Material requirement planning (mrp1)

Material requirement planning

  • Be the first to comment

Material requirement planning (mrp1)

  1. 1. Material Requirement Planning (MRP1)
  2. 2. What is MRP?  Computerized Inventory Control  Production Planning System  Management Information System  Manufacturing Control System
  3. 3. What is MRP? (cont)  This is the most comprehensive approach to manufacturing inventory and other dependents which demand an efficient inventory management system.
  4. 4. What is MRP do ?  The MRP system determines item-by-item, what is to be processed and when, as well as what is to be manufactured when.  This is based on order priorities and available capacities.
  5. 5. When to use MRP  Job Shop Production  Complex Products  Assemble-to-Order Environments  Discrete and Dependent Demand Items
  6. 6. What can MRP do?  Reduce Inventory Levels  Reduce Component Shortages  Improve Shipping Performance  Improve Customer Service  Improve Productivity  Simplified and Accurate Scheduling  Reduce Purchasing Cost  Improve Production Schedules  Reduce Manufacturing Cost  Reduce Lead Times  Less Scrap and Rework  Higher Production Quality
  7. 7. What can MRP do?(contd)  Improve Communication  Improve Plant Efficiency  Reduce Freight Cost  Reduction in Excess Inventory  Reduce Overtime  Improve Supply Schedules  Improve Calculation of Material Requirements  Improve Competitive Position
  8. 8. Three Basic Steps of MRP  Identifying Requirements  Running MRP – Creating the Suggestions  Firming the Suggestions
  9. 9. Step 1: Identifying the Requirements  Quantity on Hand  Quantity on Open Purchase Order  Quantity in/or Planned for Manufacturing  Quantity Committed to Existing Orders  Quantity Forecasted
  10. 10. Step 1: Important Information MRP is…..  Company Sensitive  Location Sensitive  Date Sensitive
  11. 11. Step 2: Running MRP – Creating the Suggestions  Critical Items  Expedite Items  Delay Items
  12. 12. Step 3: Firming the Suggestions  Manufacturing Orders  Purchasing Orders  Various Reports
  13. 13. Overview of the MRP System Product Structure File Master Production Schedule Inventory Master File Material Requirements Planning Manufacturin g Orders Purchase Orders Various Reports
  14. 14. MRP Inputs  Product Structure File  Master Production Schedule  Inventory Master File
  15. 15. Product Structure File  Bill of Materials:  It is a materials list that provides information useful to reconstruct the manufacturing process. It is the master product definition that contains “as designed” information.
  16. 16. Bill-of-Material Product Structure Tree Bicycle(1) P/N 1000 Handle Bars (1) P/N 1001 Frame Assembly (1) P/N 1002 Wheels (2) P/N 1003 Frame (1) P/N 1004
  17. 17. Master Production Schedule  Schedule of Finished Products  Represents Production, not Demand  Combination of Customer Orders and Demand Forecasts  What Needs to be Produced
  18. 18. Inventory Master File  On-Hand Quantities  On-Order Quantities  Lot Sizes  Safety Stock  Lead Time  Past-Usage Figures
  19. 19. MRP Process Item: Low-Level Code: Lot Size: Lead Time PD 1 2 3 4 5 Gross requirement Scheduled receipts Projected on hand Net requirements Planned order receipts Planned order releases
  20. 20. Terms Defined  Item – name or number for the item being scheduled  Low-Level Code – the lowest level of the item on the product structure file  Lot Size – order multiples of quantity  Lead Time – the time from when an order is placed to when it is received  PD – Past Due Time Bucket, orders behind schedule
  21. 21. Terms Defined  Gross Requirements – demand for an item by time period  Scheduled Receipts – material already ordered  Projected on Hand – expected ending inventory  Net Requirements – number of items to be provided and when  Planned Order Receipts – net requirements adjusted for lot size  Planned Order Releases – planned order receipts offset for lead times
  22. 22. Example of the MRP Process Item: PD 1 2 3 4 5 Gross requirement 10 15 25 25 30 Scheduled receipts 25 Projected on hand 20 Net requirement s Planned order receipts Planned order releases
  23. 23. Example of the MRP Process Item PD 1 2 3 4 5 Gross requiremen t 10 15 25 25 30 Scheduled receipts 25 Projected on hand 20 10 20 20 20 15 Net requiremen ts 5 5 10 Planned order receipts 25 25 25 Planned order releases 25 25 25 30 25
  24. 24. Aggregate 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 Inputs to the Production Plan
  25. 25. Production Plan Execute Material Plans Master Production Schedule Material Requirements Plan Capacity Requirements Plan Execute Capacity Plans Realistic?? No Yes The Planning Process
  26. 26. MRP Outputs Manufacturing Orders Purchasing Orders Various Reports
  27. 27. Hubbell Lighting Case Before MRP Implementation Less than 75% of orders completed on time After MRP Implementation 97% of orders completed on time 2% of orders completed with 1 to 2 days after due date
  28. 28. Summary of MRP MRP is a….. Computerized Inventory Control Production Planning System that….. Schedules Component Items as Needed which will….. Track Inventory and….. Help you in many other aspects of business

×