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MRP
From amalroy1986
Unit 2
Management of Conversion SystemChapter 11: Resource PlanningLesson 33 - Material Resources Planning -ILearning Objectives
After reading this lesson you will be able to understand
Importance of material planning
Applying MRP as scheduling and ordering systemGood Morning students, today we are going to introduce the concept of whatis known as Material Resources Planning. We will
discuss about materialrequirements planning (MRP) as an information system that enables managers to improvethe efficiency of operations, shorten delivery lead times to customers, and reduceinventory levels.
Material requirements planning (MRP) has become a centerpiece for allmanufacturing systems. The key to successful production and operationsmanagement in a manufacturing company is the balancing of requirements andcapacities. It’s that simple and yet very challenging.To understand it is essential and to practice it can be a lot of fun.Remember what you are trying to do: Meet the needs of your customers. How?By having the product available when it is wanted. In production management,we do this by knowing in advance what our requirements are now and in futureand planning ahead to have the capacity available.To begin with we shall define MRPMaterial requirements planning (MRP) A system of planning and scheduling thetime-phased materials requirement for production operations.PLANNING FOR MATERIALS NEEDSIn recent years material requirements planning systems have replaced
reactive inventory systems in many organizations. Managers using reactivesystems ask,” What should I do now?,” Whereas managers using planningsystems look ahead and ask.,” What will I be needing in the future? How muchand when?”Improved customer service and other advantages come at a cost, however. Theyrequire a system for accurate inventory and product buildup information. Theyalso require a realistic master production schedule (MPS) to specify whenvarious quantities of end items will be completed.DEMAND DEPENDENCYDemand dependency is an important consideration in choosing between reactiveand planning systems. Demand dependency is the degree to which the demandfor some item is associated with the demand for another item. With independentdemand, demand for one item is unrelated to the demand for others. In thedependent demand situation, if we know the demand for one item, we candeduce the demand for one or more related items.APPLING MRP AS A SCHEDULING AND ODERING SYSTEMMRP is a system of planning and scheduling the time-phased materialsrequirements for production operations. As such, it is geared toward meeting theend-item outputs prescribed in the master production schedule.MRP OBJCTIVES AND METHODSMRP provides the following:1. Inventory reduction: MRP determines how many of a component areneeded and when, in order to meet the master schedule.2. Reduction in production and delivery lead times: MRP identifiesmaterials and components quantities, timings, availabilities, andprocurement and production actions required to meet deliverydealings.3. Realistic commitments: Realistic delivery promises can enhancecustomer satisfaction. By using MRP, production can give marketingtimely information about likely delivery times to prospective customers.4. Increased efficiency: MRP provides close coordination among variouswork centers as products progress through them.
MRP SYSTEM COMPONENTSThe figure no. Shows the basic components of an MRP system.
Master production schedule (MPS)Inventory status file Materials Bill of materialsfilerequirements planning(MRP) processing logicOrder release require- Order rescheduling planned orders-ments (orders to be (expedite, deexpedite, (future)released now) cancel open orders)
MASTER PRODUCTION SCHEDULE (MPS)The MPS is initially developed from firm customer orders or from forecastsof demand before the MRP system begins to operate. The MPS is an input to theMRP system. Designed to meet market demand, the MPS identifies the quantityof each and product (end item) and when it needs to be produced during eachfuture period in the production-planning horizon.BILL OF MATERIALS (BOM)The BOM identifies how each end product is manufactured, specifying allsubcomponents items, their sequence of buildup, their quantity in each finishedunit, and the work centers performing the buildup sequence.
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