This topic is related to Material requirement planning, MRP.
Types of material requirement planning
Benefits of MRP. Limitation of MRP, Objective of MRP, MRP Input, MRP Output, Steps of MRP
4. “Material requirements planning (MRP) is
a production planning, scheduling,
and inventory control system used
to manage manufacturing processes”.
5. MRP is designed to answer three Questions.
What is needed
How much is needed
When is it needed.
6. Following are some of its benefits:
Improved customer services
Improved productivity
Reduced purchasing cost
Reduced inventory levels
Reduce manufacturing cost
Higher quality products
Increased efficiency.
7. Following are some of its limitations:
Need to have an expensive computer
system
Need accurate and up-to-date inputs
The reporting requirements are excessive
Resistance from inside company.
8. The main theme of MRP is
“getting the right materials to the right place at the
right time”.
Ensure materials are available for production
Maintain the lowest possible material and
product levels in store
Plan manufacturing activities, delivery
schedules and purchasing activities.
9. Following are its inputs:
Product Structure File
Master Production Schedule
Inventory Master File
11. Schedule of Finished Products
Represents Production, not Demand
Combination of Customer Orders and
Demand Forecasts
What Needs to be Produced
12. On-Hand Quantities
On-Order Quantities
Lot Sizes (orders multiples of quantity)
Safety Stock
Lead Time
Past-Usage Figures
15. Quantity on Hand
Quantity on Open Purchase Order
Quantity in/or Planned for Manufacturing
Quantity Committed to Existing Orders
Quantity Forecasted
17. Critical Items:
Items of immediate importance
Expedite Items:
Items that need to be sped up
Delay Items:
Items that are not of vital importance and
can be delayed.
19. Manufactures Industrial Lighting Products
Good-Quality Products
Poor at Meeting Due Dates
Work is Specialized for Each Customer
Job Shop Environment
Complex Products
20. 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.