Operations Management-Weekly Journal (Session 15 to 16)

Material Requirement Planning

It is basically the management of parts, component and material that are needed
to produce the end product. For example how much each part is needed, when
the parts are needed etc. Dependent demand drives the MRP. It has different
benefits for different types of industry. For assemble-to-stock industry, it
provides high benefit but for make-to-order, low.

Bill of Material (BOM)

 This shows how the product is put together. It contains complete product
description, listing of material and even the sequence. There are two
types of BOM: Module BOM & Super BOM.
 We learned and understood BOM by a flowchart showing sequence and
material involved in putting together the final product.

Lot Sizing in MRP System

 Determining lot sizes is not an easy task. It is basically strategy to created

planned order so that right amount is ordered.
 There are various types of sizing Strategies. Lot for lot, Economic order
quantity, least total cost and least unit cost.

Work Centre Scheduling

It is very important as the work centre is the place where the work happens
which includes machinery etc. It should be structured in such a way that the
work flow is good.

 Scheduling can be done in two ways. Forward and backward. In forward,

first order comes and according to that system tells us the flow of further
operations and when the order will be completed. While in backward, due
date is already defined and according to that all the tasks are scheduled.
 Major objectives of scheduling is to minimize the lead time, cost and
inventory and maximize the machine utilization.
 For the jobs also sequencing is done to determine the order of jobs to be
done in which flow and on which machine. It is also called priority
sequencing. There are various rules for that such as FCFS, SOT etc.
 Performance measures are – Due dates, Flow Time, WIP, Idle time etc.