5.mrp - ppc-app-mrp ii-jit

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TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Imagine

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

MRP SystemInventory transactions Master Production Schedule (MPS) Other Sources Of demand Engg & Process changes

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Inventory Status File

MRP Processing Logic

Bill of Materials File

Order Release Requirements

Order Rescheduling

Planned Orders

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

BOM for Chair

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TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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A Typical MRP

End Item: Wheel barrows Week No 1 2 3 4 5 6 7 8

Requirements 40 -

- 60 - 60 - 50

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

Comparison of MRP and Traditional Systems

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Dimension Demand Order Philosophy Forecast

Control Concept

MRP Dependent Requirements Based on master schedule Control on all items

Traditional Independent Replenishment Based on past demand

ABC

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

Comparison of MRP and Traditional SystemsDimension Objectives MRP Traditional

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Meet manufacturing Meet customer needs needs Discrete Lumpy but predictable Work-in-process and raw materials EOQ

Lot Sizing

Demand Pattern Types of Inventory

RandomFinished goods and spare parts

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

Logical Analysis Preceding MRP When do we want to make how many of each product? What components are required? How many of each of these is already on hand? How many have already been ordered? When will they arrive? When are more needed and how many more? When should these be ordered?TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Requirements for a Sound MRP A valid master plan Accurate bills of materials Accurate information on current inventories Accurate information on orders already placed. Reliable lead times An adequate flow of materials

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Pre-requisites of MRP A time-phased master production schedule in which every item is described by bill of materials (BOM) A unique number identifying each component and the parent in every BOM Properly structured, accurate BOM and tight control of engineering changes Accurate current inventory balances Accurate quantities and reliable delivery dates Reliable lead timesTTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Further requirements for practical application Computer software and hardware to handle huge volume of data Timely reporting of issues, receipts, inventory adjustments and order releases Discipline in handling and order releases Capable people (for handling and deciding)

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Reasons for failure of MRP It is part of an incomplete system Driven by an invalid / mismanaged Master Production Schedule Inaccurate data Improperly structured BOM Under qualified usersTTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Production Planning and Control (PPC)

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Inter Relationships of Production Planning and ControlTTN - OM 2008, February 15, 2011, DOMS, IIT Madras

Long-term Capacity Planning

forecast of future demands

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Order Entry

Master scheduling

Short Term Capacity Planning

Short Term Scheduling

Inventory Planning & Control

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

Dispatching, Releasing & Shop-floor control

21Long-term Capacity Planning Shop status & backlog Forecast of Future Demands Stock Status & Status frequency Long term Inventory plan

Capacity & Personnel plans Master Stock Status scheduling Actual shop Loads. Backlog Predicted & lead time Shop loads & Production plans

Order, Manufacturing And engineering information Order Entry Order, Manufacturing And engineering information

Requirements

Capacity and Personnel plans

Short Term Capacity Planning

Replenishment Short orders & Term Scheduling stock on hand Queues, times, Priorities, Job status, Predicted WIP levels & Loads & Shop efficiency Due dates

Inventory Planning & Control

Job status, Lead times & Open capacity

Job status, Queues and loads

Dispatching, Releasing & Machine & Shop-floor control Workforce TTN - OM 2008, February 15, 2011, DOMS, IIT Madras capacities

Long-term Capacity Planning

Shop status & backlog Order, Manufacturing & engineering information

Capacity & Personnel plans

Forecast of Future Demands Stock Status & Status frequency Master scheduling Long term Inventory plan Requirements

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Capacity & Personnel plans Order Entry

Actual shop Loads, Backlog & lead time

Order, Manufacturing & engineering information

Predicted Shop loads & Production plans

Inventory Planning & Control

Short Term Scheduling Queues, times, Job status, WIP levels & Shop efficiency Dispatching, Releasing & Shop-floor control

Short Term Capacity Planning

Job status, Lead times & Open capacity Replenishment orders & stock on hand

Machine & Workforce capacities

Priorities, Predicted Job status, Loads & Queues and TTN - OM 2008, February 15, 2011, DOMS, IIT Madras Due dates loads

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TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Aggregate Production Planning (APP)

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

Aggregate Planning Guidelines Formulate output plans that adjust production activities to provide a rational response to demand Determine corporate policies regarding controllable variables Use a good forecast as the basis for planning Plan in appropriate units of capacity Maintain as stable a work-force as possible Maintain as much inventory control as needed Maintain as mush flexibility as possible Respond to demand fluctuations in a controlled manner Evaluate planning adequacy on a regular basisTTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Aggregate Planning Plans a desired output over a time-range Pure Aggregate Planning Strategies Work-force Overtime / idle time Inventories Back-orders Subcontracting Adjusting plant capacity

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Aggregate Production Planning Each strategy has associated costs Usually mixed strategies are adopted Master Scheduling Translates end-product requirements to materials and capacity requirements

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Materials Planning

Capacity Planning

What materials ? Concerns labour and machinery When are they required ? What ? How much ? When ? How much ?

Capacity plan ascertains if schedule is feasible

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Aggregate Production Planning

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Aggregate Production Planning

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Aggregate Production Planning

Production Cost

Labour Cost

Inventory Cost

Back Order Cost

Workforce Changeover Cost

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Aggregate Production Planning Constraints Relationship between Net Inventory NI and time t-1 and t Work Force Changeover

TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

Aggregate Production Planning All decision Variables > 0 Other Possible Constraints are on Upper limit on maximum change in work force level Upper limit on scheduled overtime Upper limit on maximum backlog

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TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

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Initial Inv Regular 1 Overtime 1 Regular 2 Overtime 2 Regular 3 Overtime 3

Sales 2 3 Periods c 0 r v

34Final Inv Slack Supply

2c

3c

Basic transportation algorithm

0 0 0 0 0 0 0 S

Io R1 O1 R2 O2 R3 O3

r+c r+2c r+3c v+c v+2c v+3c r v r+c r+2c v+c v+2c r vD3

X X X XD1

X XD2

r +c v+cIf

Demand

Grand Total

C= carrying cost per unit for the interval of time r = regular production cost per unit V = overtime production cost per unit

Io = initial inventory If = Final inventory TTN - OM 2008, February 15, 2011, DOMS, IIT Madras

1Initial Inv Regular 1 Overtime 1 Subcontract1 Regular 2 Overtime 2 Subcontract2 Demand

Sales 2 Final Supply Periods Inv Slack 2c c 0 0 r v s r+c r+2c v+c v+2c s+c s+2c v v+c v sD3 S

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Transportation algorithm with subcontract

Io R1 O1S1

0 0 0 0 0 0

X X XD1

R2 O2 S2Grand Total

X XD2

C= carrying cost per unit for the interval of time r = regular production cost per unit V = overtime production cost per unit S = Subcontracting cost per unit Io = initial inventory If = Final inventory TTN - OM 2008, February 15, 2011, DOMS, IIT Madr

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