Material requirement planning, MRP.

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

1. Material Requirements Planning MRP

2. Presented by: SHOAIB ZAHEER

3. What is MRP MRP(Material requirements planning) is designed to assist manufacturers in inventory and production management.

4. Definition “Material requirements planning (MRP) is a production planning, scheduling, and inventory control system used to manage manufacturing processes”.

5. Questions MRP is designed to answer three Questions. What is needed How much is needed When is it needed.

6. Benefits 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. Limitations 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. Objectives 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. MRP Inputs Following are its inputs: Product Structure File Master Production Schedule Inventory Master File

10. Bill of Materials: List of parts & components that are required to build a product. Product Structure File

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

12. Inventory Master File On-Hand Quantities On-Order Quantities Lot Sizes (orders multiples of quantity) Safety Stock Lead Time Past-Usage Figures

13. MRP Outputs Manufacturing Orders Purchasing Orders Various Reports

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

15. Step 1: Identifying the Requirements Quantity on Hand Quantity on Open Purchase Order Quantity in/or Planned for Manufacturing Quantity Committed to Existing Orders Quantity Forecasted

16. Step 1: Important Information MRP is Company Sensitive Location Sensitive Date Sensitive

17. Step 2: Running MRP – Creating the Suggestions 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.

18. Step 3: Firming the Suggestions Manufacturing Orders Purchasing Orders Various Reports

19. Hubbell Lighting Case Manufactures Industrial Lighting Products Good-Quality Products Poor at Meeting Due Dates Work is Specialized for Each Customer Job Shop Environment Complex Products

20. Hubbell Lighting Case 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.