This document provides an overview of various manufacturing planning concepts including MRP, BOM, MRP II, DRP, and PDM. It defines each concept and describes their purpose and key elements. MRP is introduced as a computer-based inventory management system used to estimate material needs and schedule deliveries. BOM lists the parts and materials required to produce each product. MRP II expands MRP to include production scheduling and capacity planning. DRP applies MRP principles to distribution by determining optimal inventory levels and locations. Finally, PDM is described as a tool to manage all product data and development processes.

1. Module 3 : ERP Manufacturing
Perspective
By..
Poonam Pangarkar

2. What does a company’s strategy consist of ?
Company strategies concern,
• How to grow the business
• How to satisfy customers
• How to respond to changing in market conditions
• How to manage each functional piece of the business
• How to achieve strategic and financial objectives

4. Historical Perspective
ERP- Enterprise
Resource Planning
MRP II – Manufacturing
Resource Planning
MRP – Material
Requirements
Planning

5. Outline :
1. MRP: Material Requirement Planning
2. BOM: Bill Of Material
3. MRP II: Manufacturing Resource
Planning
4. DRP : Distributed Requirement Planning
5. PDM : Product Data Management

6. 1. Material Requirements Planning
(MRP)
• Material requirements planning (MRP) is a
computer-based inventory management system
designed to improve productivity for businesses.
• Companies use material requirements-
planning systems to estimate quantities of raw
materials and schedule their deliveries.

7. 1. Material Requirements Planning
(MRP)
• What products are we going to make?
• What are the material needed to make the
product?
• What are the material that we have in stock?
• What are the items that need to be
purchased?

8. •Information Technology plays a major role in
designing and implementing Material
Requirements Planning systems and processes
as it provides information about manufacturing
needs (linked with customer demand) as well as
information about inventory levels.

9. MRP techniques
• Focus on optimizing inventory.
• Used to explode Bills Of Material(BOM),
to calculate net material requirements
and plan future production.

10. • MRP systems use four pieces of information to
determine what material should be ordered and
when orders should be placed:
1. The master production schedule, which
describes when each product is scheduled to be
manufactured;
2. Bill Of Materials, which lists exactly the parts or
materials required to make each product;
3. Production cycle times and material needs at
each stage of the production cycle time; and
4. Supplier lead times.

11. MRP in context with production management
processes

12. Material Requirements Planning System
Based on a master production schedule, a
material requirements planning system:
• Creates schedules identifying the specific parts
and materials required to produce end items
• Determines exact unit numbers needed
• Determines the dates when orders for those
materials should be released, based on lead
times

13. Master
schedule
Bill of
materials
Inventory
records
MRP computer
programs
Changes
Order releases
Planned-order
schedules
Exception reports
Planning reports
Performance-
control
reports
Inventory
transaction
Primary
reports
Secondary
reports

14. Master Production Schedule(MPS)
• States which end items are to be produced, when they
are needed, and in what quantities
• includes quantities of products to be produced at
a given time period.
• Quantities are included both at aggregate and
detailed levels.
• Aggregate may refer to monthly production and
detailed may refer to weekly or daily production.
• The master production schedule takes the form of
a table in which rows represent products and
columns represent time components.

15. 15
Firm orders
from known
customers
Forecasts
of demand
from random
customers
Aggregate
production
plan
Bill of
material
file
Engineering
design
changes
Inventory
record file
Inventory
transactions
Master production
Schedule (MPS)
Primary reports
Secondary reports
Planned order schedule for
inventory and production
control (work orders,
purchase orders),
rescheduling notices
Exception reports
Planning reports
Reports for performance
control
Material
planning
(MRP
computer
program)

16. Bill Of Materials
• gives information about the product structure,
i.e., parts and raw material units necessary to
manufacture one unit of the product of interest.

17. Bill Of Materials
Bill of materials (BOM): One of the three primary
inputs of MRP; a listing of all of the raw
materials, parts, subassemblies, and
assemblies needed to produce one unit of a
product.
Product structure tree: Visual depiction of the
requirements in a bill of materials, where all
components are listed by levels.

18. Product Structure Tree: Example 1

20. Inventory
One of the three primary inputs of MRP
• Order the right part
• Order the right quantity
• Order at the right time
• Includes information on the inventory status of
each item by time period
– Gross requirements (quantity)
– Scheduled receipts
– Amount on hand
– Lead times
– Lot sizes
– And more....

21. Outline :
1. MRP: Material Requirements Planning
2. BOM: Bill Of Material
3. MRP II: Manufacturing Resource Planning
4. DRP : Distributed Requirement Planning
5. PDM : Product Data Management

22. Manufacturing Resource Planning (MRP II)
• Material requirements planning (MRP) and
manufacturing resource planning (MRPII) are
predecessors of enterprise resource planning (ERP)
• It is defined as a method for the effective planning of
all resources of a manufacturing company.
• It addresses operational planning in units, financial
planning and has a simulation capability to answer
"what-if" questions and extension of closed-loop
MRP.
• It is a total company management concept for using
human resources more productively.

23. Manufacturing Resource Planning (MRP II)
• MRP II went beyond computations of the materials
requirement to include loading and scheduling.
• MRP II systems could determine whether a given
schedule of production was feasible, not merely from
material availability but also from other resource
point of view
• Include production facilities, machine capacities and
precedence sequences.

25. Key functions and features
Every MRP II system is modular in construction.
Characteristic basic modules in an MRP II system are:
1. Master production schedule (MPS)
2. Bill of materials (BOM)
3. Production resources data
4. Inventories and orders (inventory control)
5. Purchasing management
6. Material requirements planning (MRP)
7. Capacity planning or capacity requirements
planning (CRP)

26. MRP II hierarchy

27. MRP II hierarchy
Such a structure makes it possible for a manufacturer to address the
daunting task of coordinating thousands of orders with hundreds of
tools for thousands of end items made up of additional thousands of
components.
major parts:
long range planning,
intermediate-range planning and
short-term control as shown in the figure
Activities carried out during Shop Floor Control(it is a software system
of methods and tools that are used to track, schedule and report on the
progress of work in a manufacturing plant.) fall under the intermediate
planning and short-term control categories.

28. Long Range Planning
• The scope for this level of planning ranges from six months to five
years while re-planning may vary from a monthly to an annual basis.
• This level of planning is usually conducted at the corporate level and
the decisions made typically impact all the plants belonging to one
manufacturing firm.
• Long range planning constitutes three activities: forecasting,
resource planning and aggregate planning.
• Forecasting predicts demands in the future. It is important for
determining capacity, tooling and personnel.
• Resource planning determines the capacity requirements over the
long term. This would help to determine whether to build a new plant
or expand an existing one.
• Aggregate planning determines the level of production, staffing,
inventory, overtime over the long term based on months. This
information enables management to make decisions such as whether
to build up inventory or use overtime, or a combination of the two to
meet increased demand for a product.

29. Intermediate Planning
• Intermediate planning involves planning the different functions that take place
during production.
• Intermediate Planning constitutes
1) Demand Management,
2) Master Production Schedule (MPS),
3) Rough-Cut Capacity Planning,
4) Bill of Resources,
5) Material Requirements Planning and
6)Capacity Requirements Planning.
• Demand Management is the process of converting the long-term aggregate
forecast into a detailed forecast while tracking individual customer orders.
• Master Production Schedule (MPS) is the source of demand for the MRP II system.
The MPS gives the quantity and due dates for all parts that have independent
demand. Independent demand refers to the demand for all end items and external
demand for spare parts.
• Rough-Cut Capacity Planning (RCCP) provides a quick capacity check of a few
critical resources to ensure the feasibility of the MPS. It uses a Bill of Resources (also
referred to as a Bill of Materials when only dealing with materials) for each end item
on the MPS.

30. • Bill of Resources gives a breakdown of the time in hours needed at
each critical resource required to build a particular end item. One form
of this is the Bill of Materials (BOM).
• BOM provides the relationship between end items (finished products)
and lower level items (the constituent parts of the end item).
• Material Requirements Planning conducts allocation and carries out
the job release function. It does this by releasing materials onto the
shop floor and converting them into scheduled receipts. Its output is the
job pool, which consists of planned order releases.
• Capacity Requirements Planning (CRP) provides a more detailed
capacity check on the production plans compared to RCCP. Its inputs
are: planned order releases, existing WIP positions, routing data and
capacity and lead times for all the work centers. CRP carries out infinite
forward loading by predicting the job completion time for each process
center using given fixed lead times and then predicting a given loading
over time. These loading values are then compared against available
capacity without making corrections for overloading.

31. Short Term control
• Short Term control comes into play whenever a job is released to the shop floor or
when a purchase order is released to vendors, so as to ensure on time completion
with the correct quantity and specifications.
• A purchase order is used with purchased components while Shop Floor
Control (SFC) is used with jobs destined for internal manufacture.
• Short Term control serves two functions: job dispatching and input / output
control.
• Job dispatching provides rules for arranging the queue in front of each work
station on the plant floor such that due date integrity is maintained while machine
utilization is kept high and manufacturing times are kept low. There are different job
dispatching rules that exist and at least 100 can be found in common use. These
include: Shortest Process Time (SPT), Least Slack, Least Slack per remaining
operation, Critical Ratio. (Blackstone et al. 1982).
• Input / Output control provides an easy way to check releases against available
capacity. On the shop floor, it does this by monitoring the level of Work in Progress
(WIP) at each work center. Depending on the level of WIP as compared to a
predetermined level, the release rate is maintained or adjusted by changing the
MPS until the correct rate is achieved for a given set of conditions.

33. Outline :
1. MRP: Material Requirements Planning
2. BOM: Bill Of Material
3. MRP II: Manufacturing Resource Planning
4. DRP : Distributed Requirement Planning
5. PDM : Product Data Management

34. Distribution Requirement Planning (DRP)
• It is extension of Material Requirement Planning (MRP).
• It is a process to make the delivery of goods efficient by determining its quantity
and the location where it is more required.
• The goal of DRP is to maximize product availability and reduce the costs of
ordering, transporting, and holding product
• Basically, it is the application of MRP principles to the distribution environment,
integrating the special needs of distribution.
• It is utilized by the firms to ensure the availability of right amount of materials at
the right time and right place.
• It uses time phased schedule so that it can ensure the timely production of end
product.
• The key elements in DRP is :
Demands
Current Inventory levels
Target safety stock
Quantities
Replenishment lead times.

36. • DRP enables the firm to capture data,
including demand conditions, for modifying
the forecast and to report current inventory
positions.
distribution facility and the
consistent communications
database
with
• DRP provides data for managing the
for
the
customers and the rest of the company.
DRP Purposes

37. DRP & Demand Management
• Demand management is the connection between manufacturing
and the marketplace.
• Plans derived from the DRP information and shipping
requirements are the basis for managing the logistics system.
• Continually adjusts changes in the demand, sending inventories
from central warehouse to distribution centers where they are
needed.
• DRP is connected to the logistics system
– By helping determine vehicle capacity planning.
– Helping loading.
– Determining warehouse capacity.
– Provides the data to accurately say when availability will be improved and
delivery can be expected.

38. Advantages :
• Improvement of the reliability
• It is possible to complete the orders with future orders to
create full truck loads.
• It can change to store level demands forecast.
• DRP is also able to anticipate future requirements in the
field.
• Customer Service Enhancement.
• Cost-awareness.
Disadvantages :
• Forecast Maintenance
• It only maintains the accurate requirement at the store
level.
• If inaccuracy at the store level will occur, it will result in
the increment level of noise at the warehouse.

39. Outline :
1. MRP: Material Requirements Planning
2. BOM: Bill Of Material
3. MRP II: Manufacturing Resource Planning
4. DRP : Distributed Requirement Planning
5. PDM : Product Data Management

40. • Product data means all the information that is
somehow relevant to the product.
• Examples of product data :
− Product configurations
− Part definitions and other design data
− CAD drawings, Geometric models
− Images (scanned drawings, photographs, etc.)
− Manufacturing process plans
− Electronically stored documents, notes and correspondence
−Hardcopy documents
−Project plans
− Price catalogues
− Purchase orders
− Bill of materials, etc

41. Product data management (PDM)
• Product data management (PDM) is a tool to
manage all the above mentioned product
data and also product development process.
• PDM systems handle the masses of data and
information required to design, manufacture
and/or assembly products and then support
and maintains them.

42. Who is using PDM?
• Typically the PDM users have been designers
and engineers.
• But PDM systems have expanded to include
people in many other areas, including
manufacturing personnel, project managers,
and administrators, as well as those in sales,
marketing, purchasing, shipping, and finance.

43. Product Data Management allows users to:
• Enter and review bills of material.
• Create work centres, and enter costing and
accounting information,generate lead times.
• Enter and review processes, operations, ingredients,
co-products for process manufacturing.
• Set up, review, approve, and print engineering
change orders.
• Set up start dates, manage overlapping and
concurrent operations, and calculate lead times

44. Data integration by system integration

45. Benefits of using PDM
1. Enhanced co-operation
2. Integration tool
3. Faster Processes
4. Improve productivity by re-using product
design information
5. Track and manage all product
changes/revisions/approvals