Operations Management

1. Dept. of MBA, Sanjivani COE, Kopargaon
204 OPERATIONS MANAGEMENT
Unit-III – DRP, MRP-II
Presented By:
Dr. Sanjit Singh
Sanjivani College of Engineering, Kopargaon
Department of MBA

2. Dept. of MBA, Sanjivani COE, Kopargaon
Distribution Requirements
Planning (DRP)
 Distribution requirements planning (DRP) – A
time-phased planning approach similar to
MRP that uses planned orders at the point of
demand (customer, warehouse, etc.) to
determine forecasted demand at the source
level (often a plant).

3. Dept. of MBA, Sanjivani COE, Kopargaon
Synchronized
Planning and Control
Figure 12.22

4. Dept. of MBA, Sanjivani COE, Kopargaon
DRP Example (Snowblowers)

5. Dept. of MBA, Sanjivani COE, Kopargaon
Downstream Supply Chain
Figure 12.23

6. Dept. of MBA, Sanjivani COE, Kopargaon
DRP Example
(Snowblowers)
 Records are almost identical to MRP records
with one exception:
 Instead of gross requirements, they show
forecasted demand.
• Forecasted demand – the number of snowblowers each
center expects to ship to retail customers each week.
 Activities at distribution centers are
synchronized when the total weekly planned
orders become forecasted demand in the
factory’s master schedule.

7. Dept. of MBA, Sanjivani COE, Kopargaon
Impact of Forecast Changes
Figure 12.25

8. Dept. of MBA, Sanjivani COE, Kopargaon
Impact of Forecast Changes
• When forecasted demand changes,
managers will need to increase the master
production schedules accordingly.
DRP quickly translates downstream demand
into upstream production decisions.

9. Dept. of MBA, Sanjivani COE, Kopargaon
Synchronizing Plans
in the Supply Chain
Figure 12.26

10. Dept. of MBA, Sanjivani COE, Kopargaon
MRP II
• Resource Planning is an expansion of closed loop
Manufacturing Resource Planning (MRP II) : Developed in
1980s, Manufacturing RP for managing an entire
manufacturing company.
• This system provides an information that is useful to all
functional areas and encourages cross-functional interactions.
• It supports sales and marketing by providing and orders
promising capability.
• It is a broad-based resource co-ordination system involving
other areas of a firm in the planning processes, such as
marketing, finance and HR.

11. Dept. of MBA, Sanjivani COE, Kopargaon

12. Dept. of MBA, Sanjivani COE, Kopargaon
MRP MRP II
MRP is simply about ensuring the
materials which are available to
manufacture a specific part in a
specific volume.
It take care of all other aspects of a job
including ordering, tracking inventory
and ensuring capacity.
It takes inputs all in order to make
sure you have the right amount of
materials/labor/machinery on hand at
any given time to satisfy the market
or your company production goals.
MRP II uses additional data from
accounting records and sales for further
analysis and forecasting of
manufacturing requirements.

13. Dept. of MBA, Sanjivani COE, Kopargaon
MRP MRP II
Stands for Material
Requirements Planning.
Stands for Manufacturing Resource
Planning.
Developed in 1970s. Developed in 1980s.
Widely used approach for
production planning and
scheduling in industry.
Provides an information that is
useful to all functional areas and
encourages cross-functional
interactions.
Aims at releasing and
managing manufacturing
orders and purchasing
requisitions.
Aims to control relevant material
flows and production capacity while
also taking into account the
relationship between these material
flows and the required capacity.