OPERATIONS MANAGEMENT Distribution Requirements Planning, MRP-II

Distribution Requirements Planning (DRP)

1. OPERATIONS MANAGEMENT DRP, MRP-II Presented By: Dr. Sanjit Singh Sanjivani College of Engineering, Kopargaon Department of MBA

2. 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. Synchronized Planning and Control Figure 12.22

4. DRP Example (Snowblowers)

5. Downstream Supply Chain Figure 12.23

6. 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. Impact of Forecast Changes Figure 12.25

8. 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. Synchronizing Plans in the Supply Chain Figure 12.26

10. 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. 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.

12. 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.