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Presentation on MRP Work flow
- 1. Presentation on MRP ByShehzada Sohail Deputy Manager MRP A.Z Apparel Pvt.Ltd.
- 2. MRP Controlling System •Origin of Computerized Organizational Systems. • 1960’s:Inventory Control System. • 1970’s:MRP: Material Requirement Planning. • 1980’s:MRP2: MRP & Distribution • 1990’s:MRP2 >ERP with introduction of other business functions > CRM. • Today: Web Enabled ERP-Connecting ERP Externally.
- 3. What is MRP? •Computerized Inventory Control • Production Planning System • Management Information System • Manufacturing Control System
- 4. What can MRPdo? • Reduce Inventory Levels • Reduce Component Shortages • Improve Shipping Performance • Improve Customer Service • Improve Productivity • Simplified and Accurate Scheduling • Improve Communication • Improve Plant Efficiency • Reduction in Excess Inventory • Reduce Purchasing Cost • Improve Production Schedules • Reduce Manufacturing Cost • Reduce Lead Times • Less Scrap and Rework • Higher Production Quality • Reduce Overtime • Improve Supply Schedules • Improve Calculation of Material Requirements • Improve Competitive Position
- 5. AdvantagesofMRPImplementation • Process &Work Flow Integration • Efficient utilization of resources. • Ability to share Organizational Data. • Improves Efficiency and Productivity levels. • Lower Costs. • Better customer services and satisfaction.
- 7. ThreeBasicStepsofMRP • Identifying Requirements(Quantity on hand, quantity on purchase orders, quantity in/or planned for manufacturing, Quantity forecasted.) • Running MRP – Creating the Suggestions(Critical Items, Expedite Items, Delay Items) • Firming the Suggestions
- 8. RunningMRPCreatingSuggestions • At theend of each day, the MRP system will be run to identify items as critical, expedite, or delay. The MRP system will suggest if you need to order more of a certain material by classifying into the three categories. 1. Critical items are items of immediate importance that should be taken care of right away. 2. Expedite items are items that need to be sped up so that it is completed in less than the normal lead time. 3. Delay items are item that are not of vital importance and can be delayed for the benefit of other items.
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- 10. Leadtimeoffsetting,AllocationandActionsofMRPPlanner • Gross tonet explosion tells us how many of each component are needed for a finished product. • The WHEN they are needed is the Lead Time Offset • Prior to order launching, an availability check should be done for the necessary components. • After this Order should be locked for further execution. • Release orders • Reschedule due dates. • Analyze and update system planning factors for the part numbers under ones control. • Reconcile errors and inconsistencies • Find key problem areas. • Use the system to solve critical material shortages. • Indicate where enhancements would make job easier.
- 11. Extensions of MRP MRP II Closed-Loop MRP MRP system provides input to the capacity plan, MPS, and production planning process Capacity Planning MRP system generates a load report which details capacity requirements This is used to drive the capacity planning process Changes pass back through the MRP system for rescheduling
- 12. Capacity Planning • Feedbackfrom the MRP system • Load reports show resource requirements for work centers • Work can be moved between work centers to smooth the load or bring it within capacity Smoothing Tactics 1. Overlapping Sends part of the work to following operations before the entire lot is complete Reduces lead time 2. Operations splitting Sends the lot to two different machines for the same operation Shorter throughput time but increased setup costs 3. Order or lot splitting Breaking up the order into smaller lots and running part earlier (or later) in the schedule
- 13. MRP Outputs Primary Reports •Planned Orders – schedule indicating the amount and timing of future orders • Order Releases – Authorization for the execution of planned orders • Changes – revisions of due dates or order quantities, or cancellation of orders. • Manufacturing Orders • Purchasing Orders Secondary Reports • Performance-control reports – Evaluation of system operation, including deviations from plans and cost information • Planning reports – Data useful for assessing future material requirements • Exception Reports – Data on major discrepancies encountered
- 14. Hubbell Lighting Case BeforeMRP Implementation • Less than 75% of orders completed on time After MRP Implementation • 97% of orders completed on time • 3% of orders completed with 2 to 4 days after due date.
- 15. Summary of MRP MRPis 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. Reschedule Due Dates of Open Orders as Needed. Reconcile Orders and Find Causes. Solve Shortages by Expediting. Strong Coordination with all relevant departments.
Editor's Notes
- #3 Here you can see a general evolution of ERP systems. They started as customized and proprietary Inventory control systems in the 1960’s. In the 1970’s the focus shifted to Material Requirement Planning which provided raw materials and component management and procurement. In the 1980’s the model continued to grow by including distribution channel functions. In the 1990’s This model grew further into the fully defined business suites that we have come to know as Enterprise Resource Planning Systems. The development of these products was perpetuated by the desire to move programs off of customized mainframe programs, the development of new technologies, the decentralization of businesses, and the desire to implement BPR. Today, the model grows and ERP companies are trying to fully Internet Enable their products and redesign their products for the new business models. What was once internally focused is now externally focused.
- #5 MRP can do many things to help your company succeed. Probably the most important quality of MRP is the fact that it will help your company with inventory. It plans production so that the right materials are at the right place at the right time.
- #6 MRP is a basic tool for performing the detailed material planning function in the manufacturing of components parts and their assembly into finished items.
- #7 Emphasize that this slide illustrates the overall technological structure of MRP - people and process are also extremely important in its actual success. The BOM is used to determine how many of each component is required to produce a “parent”. For example, to complete one order of fabric we have come to know that how many categories of fabric are required to make a finished product. The product structure file contains a bill of material for every item produced. In other words, this file contains all the component parts for a finished item. For example if you are producing a garment the components of a fleece Garment are > counts of yarn, fabric categories.) To determine the timing and quantity for the purchase orders for the components requires information about lead-times and lot-sizing. The production plan starts with the Sales Forecast for the each month and broken down into a Detailed Production Schedule for each week.
- #8 The MRP system looks at several components of demand in order to create its suggestions. The requirements include the above items. Many of these requirements are included in the master production schedules and inventory master files that will be discussed later in this presentation. The MRP system is company, location, and date sensitive. It is important that all data that is entered into the MRP system is accurate. Elements such as outdated bills of material, and lead times can negatively impact the results or MRP.
- #10 The is an overview of how the MRP system works. The Orange boxes indicate the inputs into the MRP system. The MRP system then processes the information and delivers outputs as indicated by the yellow boxes. The master production schedule specifies which end items or finished products the company is to produce, how many are needed, and when they are needed. The numbers that are on the master production schedule represent production, not demand, may be a combination of customer orders and demand forecasts, and gives what needs to be produced.
- #14 The MRP system delivers two main outputs along with various other reports. The two main outputs are manufacturing orders which can be released to floors for in-house production and purchasing orders which are sent to outside suppliers after reviewing the in-house capacities. The various reports offer suggested changes in previous plans or existing schedules.
- #15 Hubbell lighting decided to implement an MRP system to improve its overall capabilities and completion times. Before the MRP implementation, Hubbell Lighting completed less the 75% of its orders on time. After the MRP implementation, on time orders rose to 97% with 3% of orders completed with 1 to 2 days of the promised completion time.