operations managementmaterial requirements planning (mrp)
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TRANSCRIPT
Global Company Profile: Collins Industries Dependent Inventory Model Requirements
Master Production ScheduleBills of MaterialsAccurate Inventory recordsPurchase Orders OutstandingLead Times for Each Component
MRP Structure
MRP ManagementMRP DynamicsMRP and JIT
Lot-Sizing Techniques Extensions in MRP
Closed-Loop MRPCapacity PlanningMaterial Requirements Planning II (MRP II)Enterprise Resource Planning (ERP)
MRP In Services Distribution Resource Planning (DRP)
DRP StructureAllocation
When you complete this chapter, you should be able to :
Identify or Define: Planning bills and kits Phantom bills Low-level coding Lot sizing
When you complete this chapter, you should be able to :
Describe or Explain: Material requirements planning Distribution requirements planning Enterprise resource planning
Largest manufacturer of ambulances in the world
International competitor 12 major ambulance designs
18,000 different inventory items 6,000 manufactured parts 12,000 purchased parts
MRP: IBM’s MAPICS
Collins requires:Material plan must meet both the
requirements of the master schedule and the capabilities of the production facility
Plan must be executed as designedEffective “time-phased” deliveries,
consignments, and constant review of purchase methods
Maintenance of record integrity
Inventory
Process stage
Demand Type
Number & Value Other
Raw Material WIP Finished
Goods
Independent Dependent
A Items B Items C Items
Maintenance Dependent Operating
Item Materials WithIndependent Demand
Materials WithDependent Demand
DemandSource Company Customers Parent Items
MaterialType Finished Goods WIP & Raw Materials
Method ofEstimatingDemand
Forecast & BookedCustomer Orders
Calculated
PlanningMethod EOQ & ROP MRP
Aggregate Production Plan
MarketingCustomerDemand
EngineeringDesign
Completion
ManagementReturn onInvestment
Capital
HumanResourcesManpowerPlanning
ProcurementSupplier
Performance
FinanceCash Flow
ProductionCapacityInventory
Effective use of dependent demand inventory models requires that the operations manager know the:
master production schedule specifications or bills-of-material inventory availability purchase orders outstanding lead times
Production Plan
Execute MaterialPlans
Master ProductionSchedule
MaterialRequirements
Plan
CapacityRequirements
Plan
Execute CapacityPlans
Realistic??No
Yes
Make to Order
(Process Focus)
Assemble to Order or Forecast
(Repetitive)
Stock to Forecast(Product Focus)
Schedule finished product
Steel, Beer, Bread Light bulbs, Paper
Print shopMachine shop
Fine dining restaurant
Examples:
Number of end items
Number of inputs
Typical focus of the master production
schedule Schedule orders
Schedule modules
Motorcycles, autos, TVs, fast-food
restaurant
List of components & quantities needed to make product
Provides product structure (tree) Parents: Items above given level Children: Items below given level
Shows low-level coding Lowest level in structure item occurs Top level is 0; next level is 1 etc.
Modular bills Modules are final components used to
make assemble-to-stock end items Planning bills
Used to assign artificial parent Reduces number of items scheduled
Phantom bills Used for subassemblies that exist
temporarily
Bicycle(1)P/N 1000
Handle Bars (1)P/N 1001
Frame Assembly (1)P/N 1002
Wheels (2)P/N 1003
Frame (1)P/N 1004
1 2 3 4 5 6 7 8
D
G2 weeks
1 weekF
E
3 weeks
2 weeks
A1 week
C1 week
B
2 weeks to produce
E
D
Must have D and E completed here so
production can begin on B
2 weeks
1 week
Start production of D
Manufacturing computer information system Determines quantity & timing of dependent
demand items 1 2 3 4 5
Gross Requirements 2 20 25 15
Scheduled Receipts 5 30
Available 25 23 33 33 8
Net Requirements 7
Planned Order Receipts 7
Planned Order Releases 7
1 2 3 4 5
Gross Requirements 2 20 25 15
Scheduled Receipts 5 30
Available 25 23 33 33 8
Net Requirements 7
Planned Order Receipts 7
Planned Order Releases 7
© 1995 Corel Corp.
Computer system Mainly discrete products Accurate bill-of-material Accurate inventory status
99% inventory accuracy Stable lead times
© 1984-1994 T/Maker Co.
Increased customer satisfaction due to meeting delivery schedules
Faster response to market changes Improved labor & equipment utilization Better inventory planning & scheduling Reduced inventory levels without reduced
customer service
MRP by period report
MRP by date report
Planned orders report
Purchase requirements
Exception reports
MRPPrograms
Master ProductionSchedule
BOM
Lead Times
(Item Master File)
(Bill-of-Material)
Inventory Data
Purchasing data
Forecast &Firm Orders
MaterialRequirements
Planning
AggregateProductionPlanning
ResourceAvailability
MasterProductionScheduling
ShopFloor
Schedules
CapacityRequirements
PlanningRealistic?
No, modify CRP, MRP, or MPSNo, modify CRP, MRP, or MPS
YesYes
Shows items to be produced End item, customer order, module
Derived from aggregate plan
Shows items to be produced End item, customer order, module
Derived from aggregate plan
Item/Week Oct 3 Oct 10 Oct 17 Oct 24
Drills 300 200 310 300
Saws 300 450 310 330
Example
Therefore, these are the gross
requirements for B10 40+10 = 50 40 50 20 15+30
= 45
1 2 3 4 5 6 7 8Periods
Gross requirements: B
Periods
10 101 2 3
Master schedule for S sold directly
40 50 15
A
CB
5 6 7 8 9 10 11
Lead time = 4 for AMaster schedule for A
40 20 30
S
B C
8 9 10 1211 13
Lead time = 6 for SMaster schedule for S
Supports “preplanning”Problem with system “nervousness”
“Time fence” - allows a segment of the master schedule to be designated as “not to be rescheduled”
“Pegging” - tracing upward in the bill-of-materials from the component to the parent item
That a manager can react to changes, doesn’t mean he/she should
MRP - a planning and scheduling technique with fixed lead times
JIT - a way to move material expeditiously Integrating the two:
Small bucket approach and back flushingBalanced flow approach
Lot-for-lot Economic Order Quantity Part Period Balancing Wagner-Whitin Algorithm
Closed loop MRP Capacity planning - load reports MRP II - Material Resource Planning Enterprise Resource Planning
Tactics for smoothing the load and minimizing the impact of changed lead time include:
Overlapping - reduces the lead time, entails sending pieces to the second operation before the entire lot has completed the first operation
Operations splitting - sends the lot to two different machines for the same operation
Lot splitting - breaking up the order and running part of it ahead of the schedule
MRP II with ties to customers and suppliers
Can be used when demand for service or service items is directly related to or derived from demand for other services restaurant - rolls required for each mealhospitals - implements for surgeryetc.
DRP requires:Gross requirements, which are the same as
expected demand or sales forecastsMinimum levels of inventory to meet
customer service levelsAccurate lead timesDefinition of the distribution structure