MRP,CRP and MRPII 2019 to study and .ppt

To learn and grow

1. Material Requirements Planning (MRP)
Computer-based information system for ordering
and scheduling of dependent-demand inventories,
i.e. what is needed, how much is needed, and when
is it needed
–Dependent demand – Demand for items that are sub-
assemblies, parts or raw materials to be used in the
production of finished goods.
–Independent demand – finished products
1Dr. Mital Bhayani

2. •It is a software based production planning
and inventory control technique
•It is creation of material requirements by
way of exploding the bills of materials, and
the time phased requirement
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3. Objectives of MRP
•Ensure materials are available for production
•Maintain lowest possible level of inventory
•Plan manufacturing activities, delivery
schedules and purchasing activity
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4. MRP InputsMRP Inputs MRP ProcessingMRP Processing MRP OutputsMRP Outputs
Master
schedule
Bill of
materials
Inventory
records
MRP computer
programs
Changes
Order releases
Planned-order
schedules
Exception reports
Planning reports
Performance-
control
reports
Inventory
transaction
Primary
reports
Secondary
reports
4Dr. Mital Bhayani

5. MRP Inputs
•Master Production Schedule (MPS) – States which
end items are to be produced, when they are
needed, and in what quantities
•Bill of Materials (BOM) – a listing of all of the raw
materials, parts, and sub-assemblies needed to
produce one unit of a product
•Inventory Records – includes information on the
status of an item during the planning horizon, eg.
quantity, supplier, order lead time, lot size
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6. •Cumulative lead time: The sum of the lead
times that sequential phases of a process
require, from ordering of parts or raw
materials to completion of final assembly.
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7. Planning Horizon
1 2 3 4 5 6 7 8 9 10
Procurement
Fabrication
Subassembly
Assembly
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8. 8
Assume that we’ve scheduled 500 chairs to
be ready five weeks from now.
. . . Now
what?
Dr. Mital Bhayani

9. 9
Material Needed for a Chair
Back supports (3)
Side rails (2)
Front legs (2)
Cross bars (2)
Seat
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10. Chair Structure Tree
( “Bill of Materials”)
10
Chair
Leg
Assembly
Seat Back Assembly
Legs (2)
Cross
bar
Side
rails (2)
Cross
bar
Back
Supports
(3)
Dr. Mital Bhayani

11. 11
Graphic Lead-Time
Chair
Assembly
Back
Assembly
Leg
Assembly
(1 week)
(1 week)
(1 week)
Back Support (2 weeks)
Legs (2 weeks)
Side Rails (2 weeks)
Cross Bar (2 weeks)
Cross Bar (2 weeks)
Seats (2 weeks)
Week 5Week 4Week 3Week 2Week 1
Dr. Mital Bhayani

12. Lead-Time Key Points
•To have finished chairs at the beginning of
Week 5, we must begin production and
order materials in Week 1.
•“Exploding” the bill of materials tells us
when to order things.
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Dr. Mital Bhayani

13. Material Requirements Planning (MRP)
We need the following inputs:
1.Bill-of-Materials (BOM)
2.Inventory records
3.Master production schedule
We’ll get the following outputs:
1.What items should be ordered
2.When each item should be ordered
3.How much of each should be ordered
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Dr. Mital Bhayani

14. MRP Processing
Processes the following for each time period:
•Gross requirements
•Schedule receipts
•Projected on hand
•Net requirements
•Planned-order receipts
•Planned-order releases
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15. 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 or MPS
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16. MRP Outputs
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
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17. Other Considerations
•Safety Stock
•Lot sizing
–Lot-for-lot ordering
–Economic order quantity
–Fixed-period ordering
–Part-period model
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18. MRP Planning
Develop a tentative
master production
schedule
Use MRP to
simulate material
requirements
Convert material
requirements to
resource requirements
Firm up a portion
of the MPS
Is shop
capacity
adequate?
Can
capacity be
changed to meet
requirements
Revise tentative
master production
schedule
Change
capacity
Yes
No
Yes
No
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19. Benefits of MRP
•Low levels of inventories and reduction in
manufacturing lead time
•Ability to track material requirements hence
reducing shortages
•Ability to evaluate capacity requirements
•Means of allocating production time
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20. Capacity Requirement Planning
•It is the process of determining short-range
capacity requirements
•Determination of personnel and equipment
capacity with respect to time
•It primarily focuses on time it is measure of
productive capability of facility per unit of time
•It attempts to develop loads for each work center
•CRP is also iterative process which involves
planning and revision of capacity or MPS.
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21. Manufacturing Resources Planning (MRP II)
•Involves the whole production process, starting with
aggregate planning, then MPS and finally MRP.
•Emphasizes integration with:
–Financial planning
–Marketing
–Engineering
–Purchasing
–Manufacturing
–Personnel
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22. Market
Demand
Production
plan
Problems?
Rough-cut
capacity planning
Yes No YesNo
Finance
Marketing
Manufacturing
Adjust
production plan
Master
production schedule
MRP
Capacity
planning
Problems?
Requirements
schedules
A
d
j
u
s
t

m
a
s
t
e
r

s
c
h
e
d
u
l
e
MRP II
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23. Difference between MRP and MRP-II
Sr. NO.MRP MRP-II
1 Material Requirement
Planning
Manufacturing resource
planning
2 It focuses on materials
availability
It is integrated system which
integrates all the modules for
decision making ( Finance, HR
and Marketing requirements)
3 MRP is the predecessor of
MRPII
MRPII is expansion of MRP
4. MRP is narrower in focus MRPII is a broader concept
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24. Enterprise Resource Planning (ERP)
•Integration of financial, manufacturing and human
resources on a single computer system.
•Represents expanded effort to integrate
standardized record keeping using one database that
will permit information sharing among different
areas of an organization to manage the system more
effectively.
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