ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

ME 391A: DESIGN, PLANNING AND CONTROL OF

PRODUCTION SYSTEM

UNIT 2 SCHEDULING

Learning outcomes

 Operation sequencing and balancing

 Scheduling for mass production

 Scheduling for job order production,

 Material requirements planning (MRP)

 Enterprise Resource Planning (ERP)

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

Scheduling is defined as the allocation of resources over time to perform a

collection of tasks. This rather general definition of the term does convey two
different meanings that are important in understanding the purpose. First,
scheduling is a decision-making function: it is the process of determining a
schedule. In this sense, much of what we learn about scheduling can apply to
other kinds of decision making and therefore has general practical value.
Second, scheduling is a body of theory: it is a collection of principles, models,
techniques, and logical conclusions that provide insight into the scheduling
function. The vital elements in scheduling models are resources and tasks. The
set of tasks available for scheduling does not change over time, the system is
called static, in contrast to cases in which new tasks arise over time, where the
system is called dynamic.
Scheduling can be defined as a matching of needed activities with limited
resources to maximize customer safisfaction, maximize shop utilization and
minimize operating costs. Scheduling decisions including:
Sequencing
Timing/Release
Routing
Typical scheduling environment, in order of similarity and volume of related
jobs, are: Job shop, open job shop, batch shop, flow shop, batch/flow shop,
manufacturing cell, assembly line, transfer line, and flexible transfer line.
There are two general approaches to scheduling: forward scheduling and
backward scheduling. As long as the concepts are applied properly, the choice
of methods is not significant. In fact, if process lead times (move, queue and
setup times) add to the job lead time and process time is assumed to occur at the
end of process time, then forward scheduling and backward scheduling yield the
same result. With forward scheduling, the scheduler selects a planned order
release date and schedules all activities from this point forward in time.

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

With backward scheduling, the scheduler begins with a planned receipt

date or due date and moves backward in time, according to the required
processing times, until he or she reaches the point where the order will be
released. Other factors which directly impact the scheduling process include:
the types of jobs to be processed and the different resources that can process
each, process routings, processing times, setup times, changeover times,
resource availability, number of shifts, downtime, and planned maintenance.

1 Objectives of Scheduling
1.1 Maximization of the Utilization of Resources
For a finite set of tasks, the utilization of the resources is inversely proportional
to the time required to accomplish all the tasks. This time is known as the
makespan or maximum flow time of the schedule in a static scheduling system.
In finite scheduling problems, resource utilization is improved by scheduling a
set of tasks so as to reduce makespan.
1.2 Minimization of the Waiting in process Inventory
The reduction of the average number of tasks waiting in a queue while the
resources is busy with other tasks. If the jobs spend less time in the system, the
inventory is reduced. In scheduling terms, this leads to minimizing the average
flow time (mean flow time) or the average of the times the jobs spend in the
system. The makespan of a scheduling is constant, the sequence that reduces
mean flow time also reduces mean in-process inventory.
1.3 Minimization of Tardiness
In many situations, some or all of the tasks have due dates and a penalty is
incurred if a task is finished after that due date. The possible objectives relating
to tardiness are the minimization of maximum tardiness, the minimization of the
number of tasks that are tardy, or the minimization of mean tardiness.
Sometimes, completion of the jobs ahead of the due dates is also undesirable.
For such scheduling problems, the objective is to minimize a penalty function of

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

earliness and tardiness. Here, it can minimize either the number of early/tardy
jobs or minimize the maximum earliness/tardiness. if all the jobs have a
common due date, this is usually achieved by minimizing the squared deviation
of the job completion times about the due date. If the analyst can fix the due
date, the problem becomes one of minimizing the variance of completion fimes.

2 Operation sequencing and balancing

Scheduling is the allocation of resources over time to perform a collection of
tasks and it is a decision making function. The practical problem of allocating
resources over time to perform a collection of tasks arises in a variety of
situations. In most cases, however, scheduling does not become a concern until
some fundamental planning problems are resolved, and it must be recognized
that scheduling decisions are of secondary importance to a broader set of
managerial decisions. The scheduling process most often arises in a situation
where resource availability fixed by the long- term commitments of a prior-
planning horizon.
Sequencing is the order of processing a set of tasks over available
resources. Scheduling involves sequencing task of allocating as well as the
determination of process commencement and completion times i.e., time-
tabling. Sequencing problems occur whenever there is a choice to the order in
which a group of tasks can be performed. The shop supervisor or scheduler can
deal with sequencing problems in a variety of ways. The simplest approach is to
ignore the problem and accomplish the tasks in any random order. The most
frequently used approach is to schedule heuristically according to
predetermined "rules of thumb". In certain cases, scientifically derived
scheduling procedures can be used to optimize the scheduling objectives.
Sequence Planning is the creation of an optimized assembly sequence that
takes into account all of the production and supply restrictions. The production
sequence helps to avoid bottleneck situations while maximizing the use of

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

available resources. Sequencing helps to form the basis from which it is

possible to produce utilizing the pearl chain concept.
2.1 Benefits of sequencing
The assembly and production areas of a variant rich organization are subject to
constant changes. By making changes to the product or process, the
requirements for order planning are constantly being updated. Sequencing
allows the planner the freedom to define rules based on how orders were
created, customized, and configured. The option of creating new custom rules or
generating rules based on a standard rule library to adapt to new production
conditions is available. Additional rules such as distance conditions can be used
in flexis sequencing as well. This higher level of transparency and optimized
planning creates a holistic optimization and reduces the risk of bottlenecks and
other production disturbances.
The aim of an optimized sequence is the uniform distribution of the
assembly operation and the assembly time. Following are the key criterias for
implementing sequencing in an effective manner:
 Continuous planning from order analysis and selection to sequencing
 Sequencing based off of configurable standard rules/constraint templates
 Rules based on all contract features such as commitments, equipment
attributes, assembly allocation
 Calculate an exact schedule timeline for the sequence
 Visualization of rule violations, real-time updates to manual changes
 Final analysis of results with the ability to calculate mounting times
 Productivity Increase through smoothing of the production program
 Simplified planning and post-planning results in a increase in
productivity
 Reduced Capital investment through lower safety stock requirements
 Reduce Rework- “high pearl chain good”, reductions are possible

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

2.2 Priority rules to select order of jobs waiting for processing

Sequencing is concerned with determining the order in which jobs are
processed. Not only must the order be determined for processing jobs at work
centers but also for work processed at individual work stations. When work
centers are heavily loaded and lengthy jobs are involved, the situation can
become complicated. The order of processing can be crucial when it comes to
the cost of waiting to be processed and the cost of idle time at work centers.
There are a number of priority rules or heuristics that can be used to select
the order of jobs waiting for processing:
 Random (R). Pick any job in the queue with equal probability. This rule
is often used as a benchmark for other rules.
 First come/first served (FC/FS). This rule is sometimes deemed to be fair
since jobs are processed in the order in which they arrive.
 Shortest processing time (SPT). The job with the shortest processing time
requirement goes first. This rule tends to reduce work-in-process
inventory, average throughput time, and average job lateness.
 Earliest due date (EDD). The job with the earliest due date goes first.
This seems to work well if the firm performance is judged by job
lateness.
 Critical ratio (CR). To use this rule one must calculate a priority index
using the formula (due date–now)/(lead time remaining). This rule is
widely used in practice.
 Least work remaining (LWR). An extension of SPT, this rule dictates that
work be scheduled according to the processing time remaining before the
job is considered to be complete. The less work remaining in a job, the
earlier it is in the production schedule.
 Fewest operations remaining (FOR). This rule is another variant of SPT;
it sequences jobs based on the number of successive operations remaining

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

until the job is considered complete. The fewer operations that remain,
the earlier the job is scheduled.
 Slack time (ST). This rule is a variant of EDD; it utilizes a variable
known as slack. Slack is computed by subtracting the sum of setup and
processing times from the time remaining until the job's due date. Jobs
are run in order of the smallest amount of slack.
 Slack time per operation (ST/O). This is a variant of ST. The slack time is
divided by the number of operations remaining until the job is complete
with the smallest values being scheduled first.
 Next queue (NQ). NQ is based on machine utilization. The idea is to
consider queues (waiting lines) at each of the succeeding work centers at
which the jobs will go. One then selects the job for processing that is
going to the smallest queue, measured either in hours or jobs.
 Least setup (LSU). This rule maximizes utilization. The process calls for
scheduling first the job that minimizes changeover time on a given
machine.

3 Line balacing
Line balancing is an effective tool to improve the throughput of assembly line
while reducing bottleneck, cycle time. It is the problem of assigning operation
to workstation along an assembly line, in such a way that assignment is optimal
in some sense. It designs a smooth production flow by allotting processes to
workers so as to allow each worker to complete the allotted workload within a
given time. It assigns various tasks to workstations for optimizing the objectives
without violating any restrictions imposed on the line.
Workstation is an assigned location where a given amount of work is
performed. Normally a workstation is manned by one operator only.
Sometimes, work stations are manned by several operators, e.g. aircraft
production line.

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

Cycle Time is defined as the ratio between the effective time available per
period and the production volume per period. Effective time available = (Time
per period) X per period (%Utilization of period). The cycle time may also be
interpreted in the following ways: (a) It is the time between consecutive releases
of finished assembly’s frail the last station of the line, (b) It is the time between
consecutive releases of semi-finished products between any two adjacent
stations.
Industries are using the line balancing for grow up the rate of production
and decrease man power, idle time and buffer near machine, also for producing
more than two products. Assembly lines are the most important components of
mass production systems. The improved labor productivity is their essential
significance for manufacturers who have to produce high volume products in a
fast and cost effective manner. An assembly line consists of several successive
workstations in which a group of assembly operations (tasks) are performed in a
limited duration (cycle time). The productivity level of an assembly line
generally depends on balancing performance. Assembly line balancing (ALB) is
the problem of assigning tasks to successive workstations by satisfying some
constraints and optimizing a performance measure. This performance measure
is usually the minimization of the number of workstations utilized over the
assembly line. The benefits of Line Balancing for an organization are:
Improved process efficiency
Increased production rate
Reduced total processing time
Minimum or zero ideal time
Potential increase in profits and decrease in costs

4 Scheduling for mass production

Mass production systems are appropriate when volume of demand is large and
product variety small. It can take the form of continuous production lines

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

working round the clock, seven days a week as in many chemical and
processing plants or it can be an intermittent assembly line like assembly of cars
on two shift basis. It would be ideal production system if we have to produce
large volumes of one product (without any changes of design) continuously. For
example, Maruti Udyog Ltd has several assembly lines for assembling different
models of cars. However, owing to large volumes, one assembly line is totally
dedicated to Maruti 800 model sold domestically. Currently, the volume of
demand is so high that additional quantities are manufactured on the second
assembly line which caters for the `tatkal' and `export model'. Assembly line
technology is used very widely for assembling TV sets, electrical appliances,
computers, electronic goods, toys etc.
Assembly lines are typically as below :
Let us assume that the work content of each of the eight stages of assembly of
an appliance is as below:

Stages Work Contact (minutes) Idle Time (minutes)

S1 4.90 0.10
S2 4.90 0.10
S3 4.80 0.20
S4 5.00 -
S5 4.90 0.10
S6 4.90 0.10
S7 4.90 0.10
S8 4.70 0.30
TOTAL 39.00 1.00

If each person is given one assembly independently, he will be able to assemble

the following number of appliances :
Available time = 8 x 60 minutes
(8 hours of work) = 480 minutes
Personal time = 30 minutes
Working time = 450 minutes

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

Total no. of appliances that will be assembled in a day by one person:

450
= 11.54 ≈ 11
39
if we engage 8 person in the assembly of these electrical appliances, we shall
get a daily production of 8 x 11 = 88 appliances
(1) However, if we can go in for assembly line splitting/ the entire
manufacturing line of 39 minutes into eight stages as shown above, the
throughput rate of the system will be constrained by the slowest stage viz S4
which is 5 minutes.
Production of appliances per day = 450/5 = 90
This approach is extremely important for high volume mass production systems
and is known as Line Balancing.
(2) If through a re-arrangement of some elements of task either by better
grouping or by making slight changes in tooling etc, we are able to modify the
work content of eight stages as below:

Stages Work Contact (minutes) Idle Time (minutes)

S1 4.88 0
S2 4.88 0
S3 4.86 0.02
S4 4.86 0.02
S5 4.88 -
S6 4.88 -
S7 4.88 0
S8 4.88 -
TOTAL 39.00 0.04

In this revised line balancing of tasks at different stages, production of

appliances per day = 450/4.88 = 92
(3) Usually it is more rewarding to change the design of the appliance or layout
of components within the same appliance so that there is a decrease in the total
work content of the job in such a way that the bottleneck stage (S-4) stands to
gain the most.
Dr. Kailash Chaudhary, MBM Engineering College Jodhpur
ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

Stages Work Contact (minutes) Idle Time (minutes)

S1 4.75 0.03
S2 4.76 0.02
S3 4.78 -
S4 4.70 0.08
S5 4.74 0.06
S6 4.75 0.05
S7 4.76 0.04
S8 4.76 0.04
TOTAL 38.00 0.32

In this revised line balancing, production of appliances per day

= 450/4.78 = 94.14 say 94
It is observed that with small changes in the work content of stages of
production on the assembly line, we are able to increase the output rate.
Parameter of line efficiency is often used for measuring the effectiveness of line
balancing. It is the ratio of the total stage time and total cycle time
39 x 100
Line efficiency =  99.89% for case (b)
8 x 4.88
38 x 100
Line efficiency =  99.37% for case (c)
8 x 4.78

5 Scheduling for job order production

The setting in which shop scheduling is done is described below: Each job
represents one or more tasks that must be performed in a prescribed order and
can be assigned to one or more machines, which have the same or different
processing routes. Scheduling consists of two stages, viz. loading and
sequencing. The first stage involves assigning jobs to machine tools. If there is a
choice of machines; considerations such as quality, setup costs, preventive
maintenance, and operation availability may dictate the job assignment. All else
being equal, a good rule would be to assign a job to the machine with the least
workload. The second stage of job scheduling is to sequence the tasks on the

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

machines, which have multiple tasks to perform.

5.1 Scheduling n Tasks on One Processor
The most elementary scheduling problem occurs whenever a set of tasks is
waiting to be accomplished and only one processor is available. The processing
times and due date of each job are known and are independent of the sequence
in which the tasks are run. The scheduling problem in this situation is one of
deciding the order in which tasks are to be accomplished. The choice of
sequence will fix the completion time of each task. The makespan, which is the
time needed to complete the whole set of tasks, is constant and it is independent
of the sequence. If it assume that all tasks are available when the schedule is
started, the flow time of each task equals its completion time. Although the
makespan is a constant for all the sequences, the mean flow time, mean lateness,
and mean tardiness they can be minimized by selecting a good sequence. It is
well known that the Shortest Processing Time (SPT) rule minimizes flow times
in these systems.
5.2 Scheduling n Tasks on m Processors
In the case of m parallel processors, each job visits only one of the processors.
In the case of m processors in series, each task must visit each processor in the
same order. In the case of m identical processors, the problem is to select both
the processor to be used and the sequence for the tasks on each processor. If the
objective is to minimize mean flow time, a simple variation of the SPT
scheduling rule can be used. Scheduling situations with two or more identical
processors in parallel can be handled by first ordering all tasks using some
appropriate single-processor rule and then allocating the tasks to the processor
with the least scheduled time.
Several principles or rules have been developed to decide the next job to
be selected from amongst the various jobs waiting for loading on the machine.
A few of these rules are as below :-
Earliest Due Date First (EDO)
Dr. Kailash Chaudhary, MBM Engineering College Jodhpur
ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

Here in the jobs due for completion earliest is given the first priority for
scheduling on the machine.
First In Shop First Served (FISTS)
If this rule is applied, the job that arrived in the shop first is chosen for
scheduling on the machine
First Come First Served (FCFS)
Under this rule, first priority for scheduling is given to the job that arrived at the
machine first.
Least Slack Time (LST)
If this principle is followed, first priority is assigned to the job that has the least
slack time available. Slack time is the free time available after subtracting the
time required by the job to be processed through remaining work stages. For
example, if we are 11 days away from the due date of a job and the time taken
for the remaining three stages is 4+2+1 respectively, then the slack time is four
being the difference between the due date and the time required to complete the
remaining work on the job.
Shortest Processing Time (SPT)
Herein, first priority is accorded to the job that have the shortest processing time
on the machine. This is often followed even by the doctors whose waiting
rooms get congested with patients waiting to consult.
Least Work Remaining (LWR)
Highest priority, under the rule, is given to the job with the least amount of
processing time remaining to complete the job. The rules, also called
dispatching rules can be extended. However, managers must evaluate, through
comparative study, which of the rules is most rewarding in a job shop.

6 Material requirements planning (MRP)

Material Requirements Planning is primarily related to the inventory of raw
materials and components which are required to produce the products in a

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

facility. Their demand is usually termed as secondary demand that totally

depends upon the demand of finished product. The demand for the finished
products is known as primary demand. This primary demand is ascertained
mainly by aggregating the demand from sales orders and forecasted demand.
Then, keeping in view the product structure, secondary demand that is the
demand for the various components and raw materials is ascertained. There are
various techniques which may be used to determine the order lot size for
components and raw materials. MRP is a time phased priority planning
technique that estimates material requirements and schedules supply to meet
demand across all products and parts in one or more plants. Nowadays,
information technology plays a major role in designing and implementing MRP
systems and processes as it provides information about manufacturing needs
(linked with customer demand) as well as information about inventory levels.
MRP techniques focus on optimizing inventory.
MRP is basically concerned with the inventory of raw materials and
components which are required to produce the products in a facility. The
demand for raw materials and components is termed as secondary demand
which is essentially depending upon the demand for the finished products.
Currently, the globalization of the economy and the liberalization of the trade
markets have created new conditions in the market place which are
characterized by turbulence and intensive competition in the business
environment. Competition is continuously growing with respect to price, quality
and selection, service and promptness of delivery. Removal of barriers,
international cooperation, technological innovations naturally cause competition
to Intensify. In terms of manufacturing emphasis is placed on reducing cost
while improving quality. In addition, other factors such as timely delivery of the
product become critical techniques. It is a time phased priority planning
technique that estimates material requirements and schedules supply to meet
demand across all products and parts in one or more plants. MRP techniques are
Dr. Kailash Chaudhary, MBM Engineering College Jodhpur
ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

used to explode bills of material, to compute net material requirements and plan
future production.
MRP systems mainly use following information to determine what
material should be ordered and when:
1. The Master Production Schedule (MPS), which describes when each
product is scheduled to be manufactured
2. Bill of Materials (BOM), which lists exactly the parts or materials
required to make each product
3. Production cycle times and material needs at each stage of the production
cycle time
4. Supplier lead-times
The Master Production Schedule (MPS) and Bill of Materials (BOM) indicate
what materials should be ordered. MPS, production cycle times and supplier
lead times then jointly determine when orders need to be placed. The MPS
includes quantities of products to be produced at a given time period. The
quantities are included both at aggregate and detailed levels. Aggregate may
refer to monthly production and detailed may refer to weekly or daily
production. The MPS is a tabular form in which rows represent products and
columns represent time components. BOM gives information about the product
structure, i.e., parts and raw material units necessary to manufacture one unit of
the product of interest.
6.1 Classes of MRP User / Companies
MRP systems fall into four categories, often identified as ABCD, in terms of
use and organizational implementation.
I. Class A represents full implementation of MRP. MRP system is tied up with
company’s financial system and includes capacity planning, shop floor
dispatching, and vendor scheduling as well as links with human resource
planning. There exists continuous monitoring of performance and inventory
records and master production schedules are accurate.
Dr. Kailash Chaudhary, MBM Engineering College Jodhpur
ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

II. Class B represents a little less than full implementation. MRP system is
confined in the manufacturing area; however, it includes master production
scheduling.
III. Class C represents a classical MRP approach in which the system is
confined to management of inventories.
IV. Class D represents a data processing application of MRP. System is used for
keeping track of data rather than as decision making tool.
Conditions for the successful implementation of MRP
MRP is most valuable to companies involved in assembly operations and least
valuable to those in fabrication. For the success of MRP in an organization,
some conditions need to be fulfilled as followings:
a) Availability of a computer based manufacturing system is a must.
Although it is possible to obtain material requirements plan manually, it
would be impossible to keep it up to date because of the highly dynamic
nature of manufacturing environments.
b) A feasible MPS must be drawn up, or else the accumulated planned
orders of components might “bump” into the resource restrictions and
become infeasible.
c) The BOM should be accurate. It is essential to update them promptly to
reflect any engineering changes brought to the product. If a component
part is omitted from the BOM, it will never be ordered by the system.
d) Inventory records should be a precise representation of reality, or else the
generation of planned orders become meaningless.
e) Lead times for all inventory items should be known and given to the
MRP system.
f) Shop floor discipline is necessary to ensure that orders are processed in
conformity with the established priorities. Otherwise, the lead times
passed to MRP will not materialize.
6.2 Inputs and outputs in MRP System
Dr. Kailash Chaudhary, MBM Engineering College Jodhpur
ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

Inputs to MRP Programme

1. Product Demand- Product demand for end items stems from two main
reasons. The first is known customers who have placed specific orders,
such as those generated by sales personnel, or from interdepartmental
transactions. The second source is forecast demand. Demand from known
customers and demand forecast are combined and become the input to the
master production schedule.
2. BOM File - BOM file is a document which tells us about an items
product structure and also it tells us about the sequence in which
components are assembled and their required number. It also tells us
about the workstations in which it is assembled. BOM gives information
about the product structure, i.e., parts and raw material units necessary to
manufacture one unit of the product of interest.
3. Product structure: Product structure shows a product build up. Its shows
diagrammatically the components required to assemble it, their numbers,
and the sequence of assembly.
4. Inventory Records File - Inventory record file contains the status of all
the items in the inventory; it includes scheduled receipts of units of item
in that interval of time as a result of orders placed in the recent past to
suppliers. This necessarily contains 1) details of the suppliers of the
items, 2) time taken to supply the item and 3) size of each order to be
placed. Inventory records file under a computerized system can be quite
lengthy. Each item in inventory is carried as a separate file and the range
of details carried about an item is almost limitless. The MRP program
accesses the status segment of the file according to specific time periods.
These files are accessed as needed during the program run.
Outputs in MRP Programme
MRP programme generates different reports as the output which is very
important for the production managers for taking different decisions. The
Dr. Kailash Chaudhary, MBM Engineering College Jodhpur
ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

various outputs of MRP programme have been summarized as here under:

1. Primary Reports - Primary reports are the main or normal reports used for
the inventory and production control. These report consist of (a) Planned
orders to be released at a future time; (b) Order release notices to execute
the planned orders; (c) Changes in due dates of open orders due to
rescheduling; (d) Cancellations or suspensions of open orders due to
cancellation or suspension of orders on the master production schedule;
(e) Inventory status data.
2. Secondary Reports - Additional reports, which are optional under the
MRP system, fall into three main categories: (a) Planned Order Report-
Planned order report tells us about the planned orders that would be
released in future date or during a given interval of time. This report helps
in preparing the funds required for payments to the suppliers in the future
according to the dates and order sizes. For instance, April is the current
month and the finance manager wants to see what quantities of raw
material have to be made available in the month of May. This report helps
him very much in preparing report that what amount of fund is required
in May for making payments to the suppliers. (b) Order Release Report-
Order release report is that which gives information about planned orders
which would be released on the present date. It helps the purchase
managers to release purchase orders purchase orders to the suppliers. This
report helps the purchase manager to keep track of the purchase order that
have to be sent on a particular day. The MRP logic makers use of the lead
time of items in determining the release date of orders, so that goods are
supplied by the time the items are required for production. (c) Order
Changes Report- These refer to the orders which have been placed in the
past and the supplier of these items is preparing for these supplies to be
made to the company. During the lead time the material requirement
planning may fluctuate because some customers cancel their orders
Dr. Kailash Chaudhary, MBM Engineering College Jodhpur
ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

leading to revision of the mps because of this change in demand open

orders have to revise.
6.3 Benefits of MRP System
MRP system is of immense importance in manufacturing organizations. The
key benefits have been summarized as below:
a. Reduced inventories without reduced customer service
b. Ability to track material requirements
c. Ability to evaluate capacity requirements
d. Means of allocating production time
e. Increased customer satisfaction due to meeting delivery schedules
f. Faster response to market changes
g. Improved labor and equipment utilization
h. Better inventory planning and scheduling
In addition to above, the key outputs of MRP system are very helpful in:
1. Calculating demand for component items
2. Determining requirements for subassemblies, components, and raw
material
3. Determining when they are needed
4. Generating work orders and purchase order
5. Considering lead time

7 Enterprise Resource Planning (ERP)

An Enterprise Resource Planning (ERP) system is a fully integrated business
management system covering functional areas of an enterprise like Logistics,
Production, Finance, Accounting and Human Resources. It organizes and
integrates operation processes and information flows to make optimum use of
resources such as men, material, money and machine. Enterprise resource
planning promises
a) one database

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

b) one application
c) one user interface
ERP software for a manufacturing company typically processes the data from
and tracks the status of sales, inventory, shipping, and invoicing, as well as
forecast raw material and human resource requirements. Figure as below
presents the major application components of an ERP system. This also
illustrates some of the key cross-functional business processes flows supported
by ERP system.

One or more applications and planning systems have been introduced into the
business world for crossing some of hurdles and achieving growth. They are as
follows:
Management Information Systems (MIS)
Dr. Kailash Chaudhary, MBM Engineering College Jodhpur
ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

Integrated Information Systems (IIS)

Executive Information Systems (EIS)
Corporate Information Systems (CIS)
Enterprise Wide Systems (EWS)
Material Resource Planning (MRP)
Manufacturing Resource Planning (MRP II)
Money Resource Planning (MRP III)
ERP has evolved from the system known as MRP II (Manufacturing Resource
Planning) system with the integration of information between Vendor,
Customer and Manufacturer using networks such as LAN, WAN and
INTERNET etc. MRP II system again evolved from MRP (Material
Requirement Planning) system. MRP is a technique that explodes the end
product demands obtained from Master Production Schedule (MPS) for the
given product structure which is taken from Bill of Material (BOM) into a
schedule of planned orders considering the inventory in hand.
7.1 ERP Characteristics
Any system has to possess few key characteristics to qualify for a true ERP
solution. These features are as follows:
1) Flexibility: An ERP system should be flexible to respond to the changing
needs of an enterprise. The client server technology enables ERP to run across
various database back ends through Open Database Connectivity (ODBC).
2) Modular and Open: ERP system has to have open system architecture. This
means that any module can be interfaced or detached whenever required
without affecting the other modules. It should support multiple hardware
platforms for the companies having heterogeneous collection of systems. It
must support some third party add-ons also.
3) Comprehensive: It should be able to support variety of organizational
functions and must be suitable for a wide range of business organizations.

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

4) Beyond the Company: It should not be confined to the organizational

boundaries, rather support the on-line connectivity to the other business entities
of the organization.
5) Best Business Practices: It must have a collection of the best business
processes applicable worldwide. An ERP package imposes its own logic on a
company’s strategy, culture and organization.
7.2 Features of ERP
ERP provides multi-platform, multi-facility, multi-mode manufacturing,
multicurrency, multi-lingual facilities. It supports strategic and business
planning activities, operational planning and execution activities, creation of
materials and resources. It covers all functional areas like manufacturing, selling
and distribution, payables, receivables, inventory, accounts, human resources,
purchases etc. It performs core activities and increases customer service,
thereby augmenting the corporate image.
ERP bridges the information gap across organisations and provides
complete integration of systems not only across departments but also across
companies under the same management. So, its a solution for better project
management. ERP allows automatic introduction of the latest technologies like
Electronic Fund Transfer (EFT), Electronic Data Interchange (EDI), Internet,
Intranet, Video conferencing, E-Commerce etc.
ERP eliminates most business problems like material shortages,
productivity enhancements, customer service, cash management, inventory
problems, quality problems, prompt delivery etc. It provides intelligent business
tools like decision support system, Executive information system, Data mining
and easy working systems to enable better decisions.
7.3 Benefits of ERP
Following are some of the benefits that can be achieved by implementing the
ERP packages:

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

a) Gives Accounts Payable personnel increased control of invoicing and

payment processing and thereby boosting their productivity and
eliminating their reliance on computer personnel for these operations.
b) Reduce paper documents by providing on-line formats for quickly
entering and retrieving information.
c) Improves timeliness of information by permitting posting daily instead of
monthly.
d) Greater accuracy of information with detailed content, better presentation,
satisfactory for the auditors.
e) Improved cost control.
f) Faster response and follow-.up on customers.
g) More efficient cash collection, say, material reduction in delay in
payments by customers.
h) Better monitoring and quicker resolution of queries.
i) Enables quick response to change in business operations and market
conditions.
j) Helps to achieve competitive advantage by improving its business
process.
k) Improves supply-demand linkage with remote locations and branches in
different countries.
l) Provides a unified customer database usable by all applications.
m) Improves International operations by supporting a variety of tax
structures, invoicing schemes, multiple currencies, multiple period
accounting and languages.
n) Improves information access and management throughout the enterprise.
o) Provides solution for problems like Y2K and Single Monetary Unit
(SMU) or Euro Currency.

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur

ME 391A DESIGN, PLANNING AND CONTROL OF PRODUCTION SYSTEM UNIT 2

Review Questions
1. Define scheduling and explain its objectives.
2. Describe in details operation sequencing and balancing.
3. What are the priority rules to select order of jobs waiting for processing
in sequencing.
4. Explain line balancing with a suitable example and highlight its benefits.
5. Write about various rules of scheduling for job order production.
6. Explain Material Requirement Planning (MRP) and discuss about its
benefits.
7. Write abut inputs and outputs in a MRP System.
8. Discuss about Enterprise Resource Planning (ERP), its features and
benefits.

Dr. Kailash Chaudhary, MBM Engineering College Jodhpur