Material Resource for Engineer_CAPM.pptx

Department of
Mechanical
Engineering
Dr Gaurang Joshi
Unit no 2
Product / Process
Planning and Design
CAPM (01ME0721 )

Facility Layout
 Layout refers to the configuration of departments, work centers,
and equipment, with particular emphasis on movement of work
(customers or materials) through the system.
 Layout decisions are important for three basic reasons:
1. require substantial investments of money and effort;
2. involve long-term commitments, which makes mistakes difficult
to overcome; and
3. have a significant impact on the cost and efficiency of
operations

Factors affecting Plant
Layout
1. Plant location and building
2. Nature of Product
3. Type of Industry
4. Plant Environment
5. Spatial Requirements
6. Repairs and Maintenance
7. Balance
8. Management Policy
9. Human Needs
10. Types of machinery and equipment

Factors affecting Plant
Layout
 The basic objective of layout design is to facilitate a smooth flow of
work, material, and information through the system. Supporting
objectives generally involve the following:
 To facilitate attainment of product or service quality.
 To use workers and space efficiently.
 To avoid bottlenecks.
 To minimize material handling costs.
 To eliminate unnecessary movements of workers or materials.
 To minimize production time or customer service time.
 To design for safety.

Plant Layout : Types
 The production process normally determines the type of plant layout
to be applied to the facility:
• Fixed position plant layout
 Product stays and resources move to it.
• Product oriented plant layout
 Machinery and Materials are placed following the product
path
• Process oriented plant layout (Functional Layout).
 Machinery is placed according to what they do and materials
go to them.
• Combined Layout
 Combine aspects of both process and product layouts

Product oriented plant
layout
 This type of plant layout is useful when the production
process is organized in a continuous or repetitive way.
 Continuous flow : The correct operations flow is reached
through the layout design and the equipment and
machinery specifications.
 Repetitive flow (assembly line): The correct operations
flow will be based in a line balancing exercise, in order to
avoid problems generated by bottle necks.
 The plant layout will be based in allocating a machine as
close as possible to the next one in line, in the correct
sequence to manufacture the product.

Product Layouts
Product layouts are used to achieve a smooth and rapid flow of large
volumes of goods or customers through a system.

Product Layouts
Disadvantages
 Morale problems and to
repetitive stress injuries.
 Lack of maintaining
equipment or quality of
output.
 Iinflexible for output or
design
 highly susceptible to
shutdowns
 A high utilization of labor and
equipment
 Preventive maintenance, the
capacity for quick repairs, and
spare-parts inventories are
necessary expenses
 Incentive plans tied to
individual output are
impractical
Advantages
 A high rate of output
 Low unit cost due to high
volume
 Labor specialization
 Low material-handling cost per
unit
 A high utilization of labor and
equipment
 The establishment of routing
and scheduling in the initial
design of the system
 Fairly routine accounting,
purchasing, and inventory
control

Process Layouts
 Process layouts are designed to process items or provide services that
involve a variety of processing requirements.

Process oriented plant
layout (Functional
Layout)
 This type of plant layout is useful when the production
process is organized in batches.
 Personnel and equipment to perform the same function are
allocated in the same area.
 The different items have to move from one area to another
one, according to the sequence of operations previously
established.
 The variety of products to produce will lead to a diversity of
flows through the facility.
 The variations in the production volumes from one period to
the next one (short periods of time) may lead to modifications
in the manufactured quantities as well as the types of
products to be produced.

Process Layout
Advantages
 Handle a variety of processing
requirements
 Not vulnerable to equipment
failures
 General-purpose equipment is
less costly and is easier and less
costly to maintain
 Possible to use individual
incentive systems
Disadvantages
 In-process inventory costs can be high
 Routing and scheduling pose
continual challenges
 Equipment utilization rates are low
 Material handling is slow and
inefficient, and more costly per unit
 Job complexities reduce the span of
supervision and result higher
supervisory costs
 Special attention necessary for each
product or customer and low volumes
result in higher unit costs
 Accounting, inventory control, and
purchasing are much more involved

Fixed-Position Layouts
 In fixed-position layouts, the item being worked on remains
stationary, and workers, materials, and equipment are moved
about as needed.
 Fixed-position layouts are widely used in farming, firefighting, road
building, home building, remodeling and repair, and drilling for oil.
In each case, compelling reasons bring workers, materials, and
equipment to the “product’s” location instead of the other way
around.

Ship Building yard

Advantages
 Saves time and cost in
movement
 Flexible as changes in job
design can be easily
incorporated
 More economical when
several orders in different
stages are executed
 Adjustments can be made to
meet shortage of materials or
absence of workers.
Disadvantages
• Production period being very
long, capital investment is
quite heavy
• Very large space is required
for storage of materials and
equipment
• As several operations are
carried simultaneously,
possibility of confusion and
conflicts are high

Combination
Layouts
 Supermarket layouts are essentially process layouts, yet we find
that most use fixed-path material-handling devices such as roller-
type conveyors in the stockroom and belt-type conveyors at the
cash registers.
 Hospitals also use the basic process arrangement, although
frequently patient care involves more of a fixed-position approach,
in which nurses, doctors, medicines, and special equipment are
brought to the patient.
 Faulty parts made in a product layout may require off-line
reworking, which involves customized processing. Moreover,
conveyors are frequently observed in both farming and
construction activities.
 Cellular manufacturing - Group technology
 Flexible manufacturing systems

Essentials of Ideal Layout
1. Principle of minimum movement
2. Principle of flow
3. Principle of space
4. Principle of safety
5. Principle of flexibility
6. Principle of interdependence
7. Principle of overall integration
8. Principle of minimum investment

Computerized Relative
Allocation of Facilities
Technique (CRAFT)/
or
Computerized technique
for relative allocation of
facility
Computerized Relative Allocation of Facilities Technique (CRAFT) is a
tool that used to help improve the existing layout of the facilities.
The facility is improved by swaping two or more departments to help
arrange the facility to an optimal floor plan
1. CRAFT is more popular than the other computer based layout
procedures.
2. It is improvement algorithm & starts with an initial layout &
proceeds to improve the layout by interchanging the
department’s pair wise to reduce the total material
transportation cost.
3. It does not give the Optimal Layout; but the results are good &
near optimal, which can be later corrected to suit the need of
the layout planner.

Features of CRAFT
1.It attempts to minimize transportation cost,
Where Transportation cost=flow × distance × unit cost
It Requires assumptions that:
(1) Move cost are independent of the equipment utilization &
(2) Move costs are linearly related to the length of the move.
2. Distance matrix used is the rectilinear distance between department
centroids
3. CRAFT being a path-oriented method, the final layout is dependent on
the initial layout. Therefore, a number of initial layouts should be used
as input to the CRAFT
4. CRAFT allows the use of dummy departments to represent fixed areas
in the layout

Features of CRAFT
CRAFT input requirements are as follows:
 Initial Layout
 Flow Data
 Cost per unit distance
 Total number of departments
 Fixed departments & their location
 Area of departments

CRAFT
When will CRAFT be used?
 CRAFT is used when the number of departments is enormous that
the manual computation would be nearly impossible to do.
 CRAFT is basically used with process layout approach, which also
known as a functional layout that usually used in job shops or a
batch production facility.
What does the CRAFT do?
 CRAFT do uses a pair wise exchange algorithm that may not return
the optimal result because the final solution depends on the initial
layout of the plant.
 Rather than examine all the possible swaps, CRAFT considers the
swap of only adjacent department pair or pairs that have the same
area.

Steps of using CRAFT
 Basic step of CRAFT has been modified a number of times, but we
use COFAD (Tompkins and Reed, 1976) as a reference, a four step
algorithm, tackles the selection of MHS and layout.
 These are the following steps:
1. Determines an initial layout.
2. Selects an MHS for the layout obtained in the first step from a
candidate list of equipment.
3. Calculates and revise the cost of each move based on material
handling equipment to each move. (These three first step is
repeated until a satisfactory solution obtained) To get a good-
quality final solution, the user must provide different starting
solution, evaluate the final solution obtained by CRAFT for each
of these and choose the best one.

Advantages of CRAFT
1. The fact that the calculation is done by computer – sophisticated
calculating machine – is clearly advantages that save a lot both
time and money in the process.
2. It gives us rooms to define the variable and constraints that we
have out here in the real world.
3. Flexibility can be seen as there are 6 buttons that can be utilized
to generate series of different end solution

disadvantages of CRAFT
1. Inefficient
2. Jobs time occurred Jobs do not flow through in an orderly
fashion, therefore backtracking occurs often. Idle time, more
idle time may be experienced while workers are waiting for
more work to arrive from different departments.
3. The (not) end result. End result may need to be modified,
because once CRAFT has determined a solution it may need to
be managed to create a layout that fits in the plant.
4. Greedy algorithm. It is the algorithm that always takes the best
immediate solution. In contrary, a job shop that flow through
the system is not always constant and causes fluctuations in the
process.

Example of CRAFT
Initial Layout
Mid
point/Centroids
of departments

Dept 1 2 3 4 5 6 7 8
1 0 18.5 8.5
2 0 16.5
3 0 14.5
4 8.5 8 0 11
5 0 4.5
6 14.5 10 4 0
7 0
Computing Inter department distances
Distance measurement
should be for department
where we can have
commuting
Here 1-3,1-7,2-8,3-5,4-2,4-
7,5-8,6-1,6-3, 6-4,8-1,8-4

Dept. 1 2 3 4 5 6 7 8
1 0 18.5 8.5
2 0 16.5
3 0 14.5
4 8.5 8 0 11
5 0 4.5
6 14.5 10 4 0
7 0
8 8.5 8 0
F * C 1 2 3 4 5 6 7 8
1 0 20 2
2 0 1
3 0 2
4 1 0 2
5 0 1
6 10 5 4 0
7 0
8 2 8 0

Exchange 1 and 4
Exchange 1 and 3
Exchange 1 and 2

Dept
.
1 2 3 4 5 6 7 8
1 0 7.5 11.5
2 0 16.5
3 0 14
.5
4 11.0
7
8 0 8.43
5 0 4.5

Dept
.
1 2 3 4 5 6 7 8
1 0 7.5 11.5
2 0 16.5
3 0 14
.5
4 11.0
7
8 0 8.43
5 0 4.5
6 4 10 4 0
7 0
8 7.43 0
F * C 1 2 3 4 5 6 7 8
1 0 20 2
2 0 1
3 0 2
4 1 0 2
5 0 1
6 10 5 0
7 0

Problem 1
The present layout is shown in the figure. The manager of the company
would like to interchange the department C and F. the handling frequencies
(Cost per unit movement) between the department is given. Can we
interchange the department ? Why?
A
F
C E
B D
Dept. A B C D E F
A 0 90 160 50 0
B 70 0 100 130
C 20 0 0
D 180 10
E 40
F

Solutions
From/to A B C D E F
A 1 1 2 2 3
B 2 1 3 2
C 1 1 2
D 2 1
E 1
F
A
F
C E
B D
Distance between the department….assuming that
there is no back tracking

Dept. A B C D E F
A 0 90 160 50 0
B 70 0 100 130
C 20 0 0
D 180 10
E 40
F
From/to A B C D E F
A 1 1 2 2 3
B 2 1 3 2
C 1 1 2
D 2 1
E 1
F
Dep
t.
A B C D E F Tot
al
A 0 90 320 100 0 510
B 140 0 300 260 700
C 20 0 0 20
D 360 10 370
E 40 40
F
Total 164
0

A
C
F E
B D
From/to A B C D E F
A 1 3 2 2 1
B 2 1 3 2
C 1 1 2
D 2 1
E 1
F
Dept. A B C D E F
A 0 90 160 50 0
B 70 0 100 130
C 20 0 0
D 180 10
E 40
F
Dep
t.
A B C D E F Tot
al
A 0 270 320 100 0 690
B 140 0 300 260 700
C 20 0 0 20
D 360 10 370
E 40 40
F
Total 182
0

Problem 2
The defense contractor is evaluating its machine shops current process
layout. Figure shows the current process layout and the table shows the
current trip matrix for the facilities. Health and safety regulation demanded
fixed position of department E and F. Can we change the layout? If yes then
propose the new one with resuced cost
E
D
B F
A C
Dept. A B C D E F
A 8 3 9 5
B 3
C 8 9
D 3
E 3
F

Solution
Identify the maximum trip/traveling/handling frequency of any department
with E and F department
E
D
B F
A C
Dept. A B C D E F
A 8 3 9 5
B 3
C 8 9
D 3
E 3
F

E
D
C F
A B
E
D
B F
A C
E
D
C F
A B
E
D
C F
A B
Dept. A B C D E F
A 8 (3) 3 9 (2) 5
B 3
C 8 (1) 9 (1)
D 3
E 3
F

E
D
B F
A C
E
D
C F
A B
Existing Plan Proposed Plan
Depart
ment
pair
No if
trips
Existing Layout Proposed Layout
Distance Load (No
of trips)
*
Distance
Distance Load (No
of trips)
*
Distance
A-B 8 2 16 1 8
A-C 3 1 9 2 6
A-E 9 1 3 1 9
A-F 5 3 15 3 15
B-D 3 2 6 1 3
C-E 8 2 16 1 8
C-F 9 2 18 1 9
D-F 3 1 3 1 3
E-F 3 2 6 2 6
92 67

Problem 3
fixed position of department A. Can we change the layout? If yes then
propose the new one with reduced cost
E
D
B F
A C
Dept. A B C D E F
A 4 3 16 2 10
B 3
C 8 9
D 8 8
E 3
F

Dept. A B C D E F
A 4 (4) 3 (5) 16 (1) 2 10 (2)
B 3 (5)
C 8 (3) 9 (3)
D 8 (4) 8 (4)
E 3 (5)
F
E
D
B F
A C
F
B
C E
A D
F
C
B E
A D

F
B
C E
A D
E
D
B F
A C
Departme
nt pair
No if trips Existing Layout Proposed Layout
Distance Load (No
of trips) *
Distance
Distance Load (No
of trips) *
Distance
A-B 4 2 8 2 8
A-C 3 1 3 2 6
A-D 16 2 32 1 16
A-E 2 1 2 3 6
A-F 10 3 30 1 10
B-D 3 2 6 1 18
C-E 8 2 16 1 8
C-F 9 2 18 1 9
D-E 8 3 24 2 16
D-F 8 1 8 2 16
+6=
119
E-F 3 2 6 =153 2

Problem 4
fixed position of department F & D. Can we change the layout? If yes then
propose the new one with resuced cost
E
D
B F
A C
Dept. A B C D E F
A 4 3 16 2 10
B 3
C 8 9
D 8 8
E 3
F

E
D
C F
B A
Dept. A B C D E F
A 4 3 16 (1) 2 10 (1)
B 3
C 8 9(2)
D 8 8 (3)
E 3
F
E
D
B F
A C
E
D
B F
C A

E
D
C F
B A
E
D
B F
A C
Departme
nt pair
No if trips Existing Layout Proposed Layout
Distance Load (No
of trips) *
Distance
Distance Load (No
of trips) *
Distance
A-B 4 2 8 1 4
A-C 3 1 3 1 3
A-D 16 2 32 1 16
A-E 2 1 2 2 4
A-F 10 3 30 2 20
B-D 3 2 6 2 6
C-E 8 2 16 1 8
C-F 9 2 18 1 9
D-E 8 3 24 3 24
D-F 8 1 8 1 8+6 108
E-F 3 2 6 =153 2

Department of
Mechanical
Engineering
Dr Gaurang Joshi
Unit no 3
Material
Requirement
Planning (MRP)
CAPM (01ME0721 )

What is
MRP?
 Computerized Inventory Control
 Production Planning System
 Management Information System
 Manufacturing Control System

What is
MRP?
 This is the most comprehensive approach to
manufacturing inventory and other dependents
which demand an efficient inventory management
system.

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.

When to use
MRP
 Job Shop Production
 Complex Products
 Assemble-to-Order Environments
 Discrete and Dependent Demand Items

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

What can
MRP do?
 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

Three Basic
Steps of MRP
 Identifying Requirements
 Running MRP – Creating the Suggestions
 Firming the Suggestions

Step 1:
Identifying
the
Requirement
s
 Quantity on Hand
 Quantity on Open Purchase Order
 Quantity in/or Planned for Manufacturing
 Quantity Committed to Existing Orders
 Quantity Forecasted
 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

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 manufacturing process. It is the master
product definition that contains “as designed” information.

Bill-of-
Material
Product
Structure Tree

Master
Production
Schedule
 Schedule of Finished Products
 Represents Production, not Demand
 Combination of Customer Orders and Demand
 Forecasts
 What Needs to be Produced

Inventory
Master File
 On-Hand Quantities
 On-Order Quantities
 Lot Sizes
 Safety Stock
 Lead Time
 Past-Usage Figures

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
 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

 Amul industry Rajkot:- Mahindra & Walks wagon for shaft
manufacturing
 2013:- 160 Rs, 95 rs……180 rs ………800 Cr …..850 Cr
 On hand case, Operating revenue ……borrow from
market…reduce your profit …pay interest…..worth of
money money is keep on decreasing because the inflation
is increases

Conservative
investor
 Guarantee of return of the investment or capital + return on
investment
 Saving Account:-3.5
 Fixed Deposited :- 6 to 8.50
 Government Bonds:- 5 to 7
 PPF accounts :- 6 to 8
 NSS:- 5% (6 to 8)
 Agricultural bond of government:- 5 to 7.5%
 Gold bonds :- 2.5%

Aggressive
investor
 Direct Equity:- 45%
 MF (LC, SC, MC, Multi Cap):-12%
 LF:- 6 to 9%
 Diversified MF:- 10%

RE
 Buy car:- 1000000
 5 year

MRP
Outputs
 Manufacturing Orders
 Purchasing Orders
 Various Reports

Hubbell
Lighting
Case Study
 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

The Traditional Supply Chain
Management

Supply chain: all activities that occur between the growing or mining of raw materials
and the appearance of finished products on the
store shelf
• Traditional supply chain
• Information is passed through the supply chain reactively as participants increase
their product orders
• Inherent time lags cause problems
The
Traditional
Supply Chain
Managemen
t

The New
Technology
 Material Requirements
Planning
 (MRP)
 Sales Forecast
 Sales and Operations Plan
(SOP)
 Master Production Schedule
(MPS)
 Stock Requirements List
 Bill of Material (BOM)
 Lead Time
 Lot Sizing
 •Standard Costs
 Demand Planning
 Capacity
 Disaggregate
 Aggregate
 Inventory
 Demand Management
 Sales History
 Production Plan
 Rough Cut Plan
 Actual Costs

Non-ERP
Production
Issues
 To meet customer demand efficiently, a company must:
 Develop a forecast of customer demand
 Develop a production schedule to meet the estimated
demand
 ERP system is a good tool for developing and executing
production plans
 Goal of production planning is to schedule production
economically

Non-ERP
Production
Issues
 Production Problems
 Non-ERP Businesses have problems deciding how much to
make and when to make them

Communicatio
n problems
 Marketing and Sales personnel do not share information
with Production personnel
 Production personnel find it hard to deal with sudden
increases in demand might cause shortages or stock out

Production
Problems
Inventory problems
 Production manager lacks systematic method for:
 Meeting anticipated sales demand
 Adjusting production to reflect actual sales
Accounting and purchasing problems
 The Production and Accounting Depts. must periodically
compare
 standard costs (normal costs of manufacturing a product)
 with actual costs (overhead and labor)and then adjust the
accounts
 for the inevitable differences

The
Production
Planning ERP
Process
Three important principles for production planning:
 Work from sales forecast and current inventory levels to
create an “aggregate” (meaning combined) production
plan for all products
 Break down aggregate plan (meaning to disaggregate)
into more
 specific production plans for individual products and
smaller time intervals
 Use production plan to determine raw material
requirements

The SAP ERP
Approach to
Production
Planning

Sales
Forecasting
SAP’s ERP system takes
an integrated approach
 Whenever a sale is
recorded in Sales and
Distribution (SD) module,
quantity sold is recorded
as a consumption value
for that material
Simple forecasting technique
 Use a prior period’s sales
and then adjust those
figures for current
conditions

Sales &
Operations
Planning
In SAP ERP, sales forecast can be made using:
 Historical sales data from the Sales and Distribution (SD)
module
 Input from plans developed in Controlling (CO) module
CO module
 Profit goals for company can be set
 Sales levels needed to meet the profit goals can be
estimated

Sales &
Operations
Planning
 Rough-cut planning: common term in manufacturing for
aggregate planning
 Disaggregated to generate detailed production schedules
 Once SAP ERP system generates a forecast, the planner
can view the results graphically
 Rough-cut capacity planning applies simple capacity
estimating techniques to the production plan to see if the
techniques are feasible

Demand
Managemen
t
 Links the sales and operations planning process with
detailed
 scheduling and materials requirements planning
processes
 Output: master production schedule (MPS)
 Production plan for all finished goods
 For a business, MPS is an input to detailed scheduling,
which
 determines what bars to make and when to make them

Nature of
Demands
 All systems are implemented to satisfy
customers’ demand. There are different sources
of demand for a product and its component
items. Some item requirements are determined
by the needs of other items while others are
specified by customers. The former
requirements also come from customers, but
indirectly. Item requirements can be classified
as dependent and independent demands.


Independent
demand
 Demand for an item that is unrelated to the
demand for other items. Demand for finished
goods, parts required for destructive testing,
and service part requirements are examples of
independent demand.

MRP
Procedure
 MPS procedure consolidates the independent
demands of forecasts and customer orders to
determine the requirements of the end
products in each time bucket in the planning
horizon. After netting the on-hand and on-order
inventory, and offsetting the lead-time, the
production schedule of the end products, MPS,
is determined. In MPS procedure, the available-
to-promise (ATP) is also determined. MPS is then
fed into the MRP procedure to determine the
requirements of the lower level components
and raw materials.

Dependent
demand
 Demand that is directly related to or derived
from the bill of material structure for other
items or end products. Such demands are
calculated and need not be forecasted.
 A given inventory item may have both
dependent and independent demand at any
given time. For example, a part may
simultaneously be used as a component of an
assembly and also sold as a service part.
Production to meet dependent demand should
be scheduled so as to explicitly recognize its
linkage to production intended to meet
independent demand.

MRP
Procedure
 The gross requirements of components are
determined by calculating the planned order
releases (POR) of the parents via single level BOM
explosion. The net requirements are calculated by
subtracting the on-hand inventory and scheduled
receipts (on-order) in each time bucket. After the
consideration of lot-size, the net requirements are
transformed into the planned order receipts.
Planned order receipts appear in every period. Lead-
time offsetting shifts the planned order receipts
backward and derives the POR which are the MRP
result of current item. The MRP procedure continues
to explode the POR to obtain the gross requirements
of its components. The MRP repeat the procedure
until the POR of all the items are determined. The
flow chart of the MRP procedure is described in
Figure

MRP
Procedure
 The net requirement in a period is determined in MRP
procedure by the following formula,
Net requirement = Gross requirement – Available inventory
 The available inventory for the first period is
Available inventory = On hand inventory + Scheduled
receipts of the first period – Allocations – Backorders –
Safety stock.
 And, for the other periods
Available inventory = Projected available balance at the end
of last period + Scheduled receipts of the current period
If the calculated net requirement is positive, then it is the
net requirement of that item in that period. In this case, the
projected on-hand balance at the end of that period is less
than the safety stock, and the projected available balance is
the projected on-hand balance plus the planned order
receipt in that period. If the calculated net r

MRP Case 1:
Sunglasses
Sets
 In the end product, two temples are assembled to a
single-piece lens to make a pair of sunglasses. Two spare
lenses are sold along with the sunglasses. They are put in
a plastic bag to form a sunglasses set. We ignore the
plastic bag in the end product. The item master file is
shown in Table

MRP Case 1:
Sunglasses
Sets
Product
Structure for
Sunglasses Set
For example, a sunglasses set
is made of a pair of
sunglasses and two lenses,
and a pair of sunglasses is
made of a lens and two
temples

MRP Case 1:
Sunglasses
Sets
BOM Table

MRP Case 1:
Sunglasses
Sets
Independent Demand data table
Scheduled Recipt data table

MRP Case 1:
Sunglasses
Sets
MPS Calculation for A
MPS Calculation for B

MRP Case 1:
Sunglasses
Sets
MPS Calculation for C
MPS Calculation for D

MRP Case 1:
Sunglasses
Sets
MPS

MRP Case 2:
Internation
al Airport
Services
 When an aircraft arrives at an international
airport, a towing tractor marshals the aircraft to
an indicated gate. Ramp services and cabin
services are proceeded during the period when
the aircraft stays. Ramp services include the toilet
cleaning, gas refueling, etc. Cabin services
include catering load, garbage dumping, etc.
Figure is a simplified aircraft Material
Requirement Planning
 Since the times for the aircraft arrival and
departure are scheduled, the marshaling services
must be performed at predetermined times. The
other services can be scheduled between the
earliest start time (EST) and the latest start time
(LST) as shown in Figure

MRP Case 2:
Internation
al Airport
Services

MRP Case 2:
Internation
al Airport
Services
Scheduling of Airport Services

Service
Master File
of Airport
Services
Service Master File of Airport Services

The structure of the services is shown in Figure . Since the service-time of a
service means its duration, we have to count the loads of the resources in all
time buckets from the start to the end of services. For example, the toilet
cleaning service lasts two time units, its service-time is set as 2 in the service
master file, and two records are defined in the “bill of service” file with
offset-time (OT) 1 and 2. The quantity-per (QP) defined in bill of service file
is the load of the service. The quantity-per of the toilet cleaning service is 2,
which means two lavatory trucks are needed during the service. The offset-
time and the quantity-per determine that two lavatory trucks are required
during a period of two consecutive time buckets. Note that the service times
in the service master file are used to create the offset-times in the BOM file,
and the lead-times used by MRP are all zero.

MSS for aircraft arrival and departure
Suppose a certain aircraft is scheduled to arrive at
time 1 and depart at time 12, the schedule is stated
similar to MPS in the manufacturing cases, now we
name it the master service schedule (MSS), as
shown in Table

Services have neither inventories nor scheduled receipts as in the cases of
manufacturing. Services must be provided at the moment when customers use it. In
the MRP calculation procedure, gross requirements are the services that customers
need. Since there is no on-hand or on-order inventory, the net requirement equals the
gross requirement. Only two rows remain in the MRP reports. MRP is now renamed
as “service requirement planning”, and the rows are named “required” and
“scheduled”. The MRP procedure is described in Table .
In table , the scheduled service of A in time 1 required by X should not be exploded
further. This can be done with a field of X-A record in the BOM file indicating no
further explosion. The above example is for a single aircraft. The system will schedule
all the flights in MSS, then use MRP procedure to calculate all the services required.
The service requirements are scheduled by MRP at the latest start time. The system
also calculates the EST schedule. Schedules are then adjusted manually or
automatically between EST and LST to balance the load and capacity.

This example explains how ERP is used in a service business. Time buckets
are sliced as small as the minimal unit a service requires. All service times
are multiple of the time bucket length. Lead-times are all set to 0 because the
start time of the parent operation is exactly the end time of the child
operation, or differs by 1, which can be controlled by offset-time. The
service time determines how many time buckets are needed by an operation.
An operation repeats, as a child item, the required time buckets times, say n,
with offset-time from 1 to n in each BOM record. The service requirement
planning uses the same functions of item master, BOM, MPS, and MRP in
the ERP system. The idea can also be applied to manufacturing operations.

Summary of
MRP
 ERP system can improve the efficiency of production and
 purchasing processes
 Efficiency begins with Marketing sharing a sales forecast
 Production plan is created based on sales forecast and
shared
 with Purchasing so raw materials can be ordered properly

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

Thank you for your
Kind Attention
Dr Gaurang Joshi
Associate Professor
Department of Mechanical engineering
Marwadi University, Rajkot, Gujarat, India
Email:- gaurang.joshi@marwadieducation.edu.in

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