Material requirements planning (MRP)

MRP is a production planning and inventory control system used to manage manufacturing processes. Most MRP systems are
software-based, while it is possible to conduct MRP by hand as well.

An MRP system is intended to simultaneously meet three objectives:

• Ensure materials are available for production and products are available for delivery to customers.
• Maintain the lowest possible material and product levels in store
• Plan manufacturing activities, delivery schedules and purchasing activities
.
INVENTORY CONTROL

Assuring supply can easily be achieved by stocking the shelves with every imaginable spare
part in such enormous quantities that almost any combination of required materials is in stock at
any given time. Unfortunately, nothing in life is free. Materials cost money and take up plenty of
space, and very few materials managers have access to unlimited funds. Finance and plant
management are responsible for making sure that purchasing budgets are monitored and controlled,
and inventory investment levels are optimized.

Uncontrolled spending leads to bloated inventory, which in turn often results in mandated
investment reductions. But managing inventory is not as easy as just setting the objective and then expecting it to happen
all by itself. Nor is it simply a matter of cutting off funding or randomly eliminating parts from the storeroom. These may
have the desired effect on investment, but what about service and, more importantly, the potential impact in terms of lost
production?

This leaves materials management in the difficult predicament of having to concurrently

maintain adequate levels of material supply while also prudently managing the company's
resources. To effectively support maintenance and production, it is critical to have the required
parts available when needed. Finance and plant management will generally support the purchase of
materials necessary to keep plant equipment running in order to maintain production levels.
However, "available" doesn't have to mean "on the shelf," and "when needed" doesn't necessarily
imply "right away." There is a point at which both service and investment are optimized so that
they become mutually achievable objectives.

Effective inventory management requires an understanding of the fundamental material

management principles, data and work processes that impact material supply and contribute to the
total cost of the MRO operation. It also involves the establishment of realistic and measurable
goals, along with disciplined approaches for achieving them. Most importantly, it requires a
commitment of time from knowledgeable individuals to make informed, intelligent and often
difficult decisions.
The blueprint for success is
Integrated Inventory Management
. This methodology provides a
vehicle that helps arrive at the right decisions about what to buy, when to buy it, what to keep in
stock and what to eliminate. It provides a disciplined process that effectively controls storeroom
investment and associated inventory costs while maintaining an acceptable level of service.
In most established markets around the world, soft drinks rank first among manufactured
beverages, surpassing even milk and coffee in per capita consumption. With product demand
continuing to increase, soft drink manufacturers have shifted to faster, more automated machinery.
However, as production lines become faster and more complex, many plants are struggling to keep
maintenance costs in check. This was precisely the problem that managers at Pepsi Bottling
Group’s facility battled for several years.

Pepsi Bottling Group is the world’s largest manufacturer, seller and distributor of Pepsi-Cola
beverages. With annual sales of nearly $11 billion, the company’s fastest growing segment is non-
carbonated beverages, including the number one brand of bottled water in the U.S., Aquafina, as
well as Tropicana juice drinks and Lipton Ice Tea. As part of a 24/7 production operation, the
company’s Detroit plant ships about 27 million cases per year.

Production at the plant begins as empty bottles are unloaded from trucks via conveyor and
transported to a depalletizer. From there, they are, rinsed, dried and sent to a filling machine (filler
speeds at the plant vary based on bottle size, ranging from 350 to 1,000 bottles per minute). The
bottles leave the fillers and make their way to a packaging machine, and then to a palletizer. Each
pallet is wrapped for distribution and moved to the warehouse for shipping. While controllers and software are the brains
behind any production operation, sensors play a critical role as the eyes and ears. The plant uses a variety of sensors to
monitor bottles as they travel through the sequence of steps and to manage the flow to the individual stations. Line
sensors match the speed of the conveyor (controlled by variable speed drives) to the precise spacing needed for
accomplishing each production step. However, these sensors became a significant issue for the plant over the years.

Like many high-volume manufacturing plants, Pepsi’s primary focus is on quality and
productivity, with less attention given to issues like parts inventory and technology migration. As a
result, the company’s inventory of sensors swelled over the years to include more than 120
different varieties. Many of these included multiple styles of the same product stocked under
different brands. A similar problem was developing with its drives inventory, which had grown to
over 50 different part numbers.

The wide variety of sensors made it progressively more complex and time-consuming to
replace a faulty device. Despite its fast, high-performance machinery, the increasingly lengthy and
more frequent downtime was beginning to impact the company’s ability to meet its productivity
goals. In addition, operating costs were on the rise due to the excess spares inventory.

“Because of the extensive number of sensors we had in inventory, including multiple styles
and brands, simply finding the right replacement could result in an hour of downtime,” said
Tony Yanora, maintenance manager, Pepsi Bottling Group.
“We had a lot of specialized sensors that we didn’t really need which increased our inventory costs and made it a
nightmare for our technicians to make repairs – if we even had the right parts in stock.”

A more strategic approach to maintenance was necessary, as even the smallest of delays could
cost the plant thousands of dollars in lost production and overtime. Knowing that effective parts
management and fast, reliable equipment repair lies at the heart of efficient manufacturing, the
company explored ways to get its inventory and maintenance processes under tighter control.
That’s when it decided to turn to Rockwell Automation for help.