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

TTN - OM 2008, TTN - OM 2008, April 11, 2023April 11, 2023, DOMS, IIT Madras, DOMS, IIT Madras

ImagineImagine

MasterProduction

Schedule (MPS)

InventoryStatus

MRPProcessing

Bill of Materials

OrderRelease

Requirements

OrderRescheduling

PlannedOrders

MRP SystemMRP System

Other SourcesOf demand

Inventorytransactions

Engg & Process changes

6BOM for ChairBOM for Chair

A Typical MRPA Typical MRP

Week NoWeek No 11 22 33 44 55 66 77 88

RequirementsRequirements 4040 -- -- 6060 -- 6060 -- 5050

End Item: Wheel barrowsEnd Item: Wheel barrows

11Comparison of MRP and Traditional SystemsComparison of MRP and Traditional Systems

ABCABCControl on all Control on all itemsitems

Control ConceptControl Concept

Based on past Based on past demanddemand

Based on master Based on master scheduleschedule

ForecastForecast

ReplenishmentReplenishmentRequirementsRequirementsOrder PhilosophyOrder Philosophy

IndependentIndependentDependentDependentDemandDemand

TraditionalTraditionalMRPMRPDimensionDimension

12Comparison of MRP and Traditional SystemsComparison of MRP and Traditional Systems

Finished goods and Finished goods and spare partsspare parts

Work-in-process Work-in-process and raw materialsand raw materials

Types of InventoryTypes of Inventory

RandomRandomLumpy but Lumpy but predictablepredictable

Demand PatternDemand Pattern

EOQEOQDiscreteDiscreteLot SizingLot Sizing

Meet customer Meet customer needsneeds

Meet Meet manufacturing manufacturing needsneeds

ObjectivesObjectives

TraditionalTraditionalMRPMRPDimensionDimension

Logical Analysis Preceding MRPLogical 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?

Requirements for a Sound MRPRequirements 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

Pre-requisites of MRPPre-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 times

Further requirements for practical Further requirements for practical applicationapplication

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)

Reasons for failure of MRPReasons 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 users

Production Production Planning and Planning and Control (PPC)Control (PPC)

Inter Relationships of Inter Relationships of Production Planning Production Planning

and Controland Control

Masterscheduling

Forecastof FutureDemands

Long-termCapacityPlanning

OrderEntry

ShortTerm

CapacityPlanning

ShortTerm

Scheduling

Dispatching, Releasing &

Shop-floor control

InventoryPlanning &

ControlOrder,Manufacturing& engineeringinformation

Order,Manufacturing& engineeringinformation

Capacity &

Personnel plans

Actual shopLoads, Backlog

& lead time

Shop status& backlog

Job status,Queues and

Priorities,PredictedLoads &Due dates

PredictedShop loads &Production

Job status,Lead times &Open capacity

Stock Status &Status frequency

Require-ments

Long termInventory

Capacity &Personnel

Replenishment orders &

stock on handMachine &Workforcecapacities

Queues, times,Job status,

WIP levels &Shop efficiency

Aggregate Aggregate Production Planning Production Planning

(APP)(APP)

25Aggregate Planning GuidelinesAggregate 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 basis

Aggregate PlanningAggregate 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

Aggregate Production PlanningAggregate Production Planning

Each strategy has associated costs Usually mixed strategies are adopted

Master SchedulingTranslates end-product requirements to

materials and capacity requirements

Capacity plan ascertains if schedule is feasibleCapacity plan ascertains if schedule is feasible

Materials PlanningMaterials Planning Capacity PlanningCapacity Planning

What materials ? When are they required ? How much ?

Concerns labour and machinery

What ? When ? How much ?

ProductionCost

LabourCost

InventoryCost

Back OrderCost

WorkforceChangeover

ConstraintsConstraintsRelationship between Net Inventory “NI” Relationship between Net Inventory “NI”

and time “t-1” and “t”and time “t-1” and “t”

Work Force ChangeoverWork Force Changeover

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

11 22 33 Final InvFinal Inv SlackSlack SupplySupply

Initial InvInitial Inv IIoo

Regular 1Regular 1 RR11

Overtime 1Overtime 1 OO11

DemandDemand DD11 DD22 DD33 IIff SS Grand TotalGrand Total

Sales Periods

C= carrying cost per unit for the interval of timer = regular production cost per unit V = overtime production cost per unitIo = initial inventory If = Final inventory

sporta

XXXX X

11 22 Final Final InvInv

SlackSlack SupplySupply

Subcontract1Subcontract1 SS11

Subcontract2Subcontract2 SS22

DemandDemand DD11 DD22 DD33 SS Grand TotalGrand Total

Sales Periods

tractX

C= carrying cost per unit for the interval of timer = regular production cost per unit V = overtime production cost per unitS = Subcontracting cost per unitIo = initial inventory If = Final inventory

s+c s+2c

11 22 33 Final InvFinal Inv SlackSlack SupplySupply

DemandDemand DD11 DD22 DD33 IIff SS Grand TotalGrand Total

Sales Periods

C= carrying cost per unit for the interval of timer = regular production cost per unit V = overtime production cost per unitIo = initial inventory If = Final inventory

r + b r + b

r + 2b r + 2b

r + b r + b

back o

Operation scheduleOperation schedule

Operation sheets:Operation sheets: Sequence of operationSequence of operation

Processing timesProcessing times

Factors of productionFactors of production

SchedulingScheduling

Forward scheduling : Forward scheduling :

Excess stock for distant due datesExcess stock for distant due dates

Backward scheduling: Backward scheduling:

Initially machine idleInitially machine idle

Risk of breakdown and shortageRisk of breakdown and shortage

Schedules include transit timeSchedules include transit time

Some typical possibilities of schedulesSome typical possibilities of schedulesOperation 1 Operation 2 Operation 3

Operation 1

Operation 2

Operation 3

Operation 1 Operation 2 Operation 3

Possible Corrective actions for Possible Corrective actions for nearing due datesnearing due dates

Over timeOver timeExtra Shift (if not available)Extra Shift (if not available)Sub contractSub contractExtra menExtra men ‘‘Other purpose’ machineOther purpose’ machineReschedule less critical areasReschedule less critical areas

Decide based on situation!!!Decide based on situation!!!

Production Control SystemsProduction Control Systems

Order Control – BatchOrder Control – BatchFlow control - MassFlow control - Mass

Order Control – BatchOrder Control – Batch

Identify what to produceIdentify what to produceSales ordersSales orders

ForecastForecast

Manufacturing ordersManufacturing orders

Shortage listShortage list

When to produceWhen to produce

How much to produceHow much to produceMaster ScheduleMaster Schedule

Order Control – Gantt ChartOrder Control – Gantt Chart

Order No Time Scale

Operation1 Operation2 Operation3 Scheduled

Operation1 Operation2 Actual

Operation1 Operation2 Operation3 Operation4 Scheduled

Operation1 Operation2 Operation3 Actual

Machine Control – Gantt ChartMachine Control – Gantt ChartMachine

NoTime Scale

Order No 1 Order No 2 Order No 3 Scheduled

Order No 1 Order No 2 Actual

Order No 1 Order No 2 Order No 3 Order No 4 Scheduled

Order No 1 Order No 2 Order No 3 Actual

44Master ScheduleMaster Schedule

When to produceWhen to produce

How much to produceHow much to produce

Product # 1

1 2 3 4 5 6 7 8 9 10

How to do?How to do?

Processing InstructionsProcessing InstructionsAssembliesAssembliesBOMBOMBlue Prints & part drawingsBlue Prints & part drawingsExploded Assembly requirementsExploded Assembly requirementsRoute sheetsRoute sheets

Information on factors of productionInformation on factors of production

Check with Check with Stock levels - Buying or makingStock levels - Buying or makingMen – efficiency of labor, quality circles, Men – efficiency of labor, quality circles,

union meetingsunion meetingsMaterials – rework/ rejections/ scrapMaterials – rework/ rejections/ scrapMachine - efficiency of machine/ breakdownsMachine - efficiency of machine/ breakdownsAccessories – Toolings (Tools, Jigs & Fixtures)Accessories – Toolings (Tools, Jigs & Fixtures)

gaugesgauges

Dispatching and ExpeditingDispatching and Expediting

DispatchingDispatchingShop formsShop forms

Manufacture orderManufacture orderMove OrdersMove Orders

ExpeditingExpeditingFollowup chartsFollowup charts

Capacity plan ascertains if schedule is feasibleCapacity plan ascertains if schedule is feasible

Materials PlanningMaterials Planning Capacity PlanningCapacity Planning

What materials ? When are they required ? How much ?

Concerns labour & machinery What ? When ? How much ?

Aggregate Production PlanningAggregate Production Planning - Revisited- Revisited

Manufacturing Manufacturing Resource Planning Resource Planning

(MRP-II)(MRP-II)

Rough -cut capacity plan

Prospective MPS

Authorized MPS

Capacity available within MPS?

Change for MPS sufficient?

More capacity required?

CAPACITY REQUIREMENTS PLANNING CAPACITY REQUIREMENTS PLANNING – – INTERACTIONS WITH MPSINTERACTIONS WITH MPS

51MRP IIMRP II

Production Planning

Sales Demand Sales Forecast

Actual Inventory or Back Log levels

Senior Management Decisions

Resource Requirements Planning

Master Schedule

Capacity Requirements Planning (In-house)

Material Requirements Planning

Purchase Orders Shop Orders

Compare with Supplier Information

Supplier Communication

Shop Floor Control

Compare with Shop Floor Information

Continue with plans

Supplier Capacity Requirements Planning

On Schedule

YESYES NONO

Just in Time (JIT) Just in Time (JIT) ManufacturingManufacturing

COMPLETE AND ACCURATE DATA

SIMPLIFIED MODULAR STRUCTURE SHORT CHANGE OVER TIMES

MACHINE RELIABILITY

PROCESS CAPABILITY

FLEXIBLE PEOPLE

EDUCATION AND TRAININGQUALITY ON LINE

QUALITY CIRCLES

LEVEL SCHEDULES

SUPPLIER DEVELOPMENT

KANBAN

STEPS TO JIT MANUFACTURESTEPS TO JIT MANUFACTURE

JIT vs. MRP: a comparisonJIT vs. MRP: a comparison

Asset, useful to Asset, useful to absorb absorb

fluctuationsfluctuations

Liability, try to Liability, try to eliminateeliminate

InventoryInventory

Impersonal-drive Impersonal-drive themthem

Involve themInvolve themWorkersWorkers

Plan with themPlan with themMinimizeMinimizeLead timesLead times

Not criticalNot critical

Allow queuesAllow queues

Constant care to Constant care to minimize breakdownsminimize breakdowns

MaintenanceMaintenance

TolerateTolerateEliminateEliminateScrapScrap

AdversariesAdversariesPart of your teamPart of your teamVendorsVendors

MRPMRPJITJIT

JIT vs. MRP: a comparison (Contd.)JIT vs. MRP: a comparison (Contd.)

Medium to low Medium to low volumevolume

High to medium High to medium volumevolume

SuitabilitySuitability

NecessaryNecessary

RE-ACTIVERE-ACTIVE

EliminateEliminate

PRO-ACTIVEPRO-ACTIVEQueues Queues

(WIP)(WIP)

Plan for themPlan for themCut down the timeCut down the timeSet-upsSet-ups

To balance set-To balance set-up cost & holding up cost & holding

costcost

Bare minimumBare minimum

(Single piece?)(Single piece?)Lot sizeLot size

MRPMRPJITJIT

Evolution of Manufacturing Control systems Evolution of Manufacturing Control systems [1/2][1/2]

Order Point systemOrder Point systemForecast with past data.Forecast with past data.Inventory control with EOQ and ABC analysis.Inventory control with EOQ and ABC analysis.

MRPMRPBased on Master schedule, B.O.M. and Based on Master schedule, B.O.M. and

predicted demand.predicted demand.Complete inventory control.Complete inventory control.Convenient lot-size.Convenient lot-size.

Evolution of Manufacturing control systems Evolution of Manufacturing control systems [2/2][2/2]

MRP IIMRP II

Incorporates capacity planning.Incorporates capacity planning.

Incorporates feed back.Incorporates feed back.

JITJIT

Emphasis on waste reduction.Emphasis on waste reduction.

Aim for Zero defect.Aim for Zero defect.

Aim for Zero Inventory.Aim for Zero Inventory.

Quick change-overs.Quick change-overs.

Small lots.Small lots.

Multi-skilled worker.Multi-skilled worker.

KanbanKanban

Thank You !!!Thank You !!!

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

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