Materials Requirement Planning Chapter 12 1 Objectives ERP Modules and Implementation Material Requirements Planning MRP Process Capacity Requirements Planning 2 ERP Modules 3 Sec# 12213 1
ERP Implementation Analyze, rethink, redesign, map, and connect business processes Determine which ERP modules to implement Web-based ERP systems Customer Relationship Management (CRM) Supply Chain Management (SCM) Collaborative Product Commerce (CPC) 4 Material Requirements Planning (MRP) Computerized inventory control & production system JIT component scheduling Dependent demand Complex job shop production 5 Dependent Demand Independent demand Dependent demand 100 x 1 = 100 tabletops 100 tables 100 x 4 = 400 table legs 400 Continuous demand 400 Discrete demand No. of tables 300 200 100 No. of tables 300 200 100 1 2 3 4 5 Week M T W Th F M T W Th F 6 Sec# 12213 2
MRP System Master production schedule Product structure Material requirements Item master Planned order releases Work Purchase Rescheduling notices 7 Master Production Schedule Derived from aggregate production plan Specifies how many finished products need to be produced in each period The quantities represent production, not demand The quantities may consist of a combination of customers and forecasted demand The quantities represent what needs to be produced, not what can be produced 8 Product Structure File Clipboard Level 0 Pressboard Clip Ass y Rivets (2) Level 1 Top Clip Bottom Clip Pivot Spring Level 2 9 Sec# 12213 3
Bill of Material (BOM) LEVEL ITEM QUANTITY 0 - - - - Clipboard 1-1 - - - Clip Assembly 1 - - 2 - - Top Clip 1 - - 2 - - Bottom Clip 1 - - 2 - - Pivot 1 - - 2 - - Spring 1-1 - - - Rivet 2-1 - - - Press Board 1 Specialized BOMs Phantom bills K-bills Modular bills 10 Item Master File Info on every item produced, ordered, or inventoried On-hand quantities, on-order quantities, lot sizes, safety stock, lead times,... Continuous inventory updates Maintain orderly stockrooms Establish and enforce inventory procedures Ensure prompt and accurate inventory transactions Taking inventory count on regular basis Reconciling inventory discrepancies in timely manner 11 MRP Process MRP schedules production for all items below finish product level Four steps going down product structure Exploding BOM Netting out inventory Lot sizing Time-phase requirements MRP matrices for each item starting at zero level 12 Sec# 12213 4
Matrix header Item name or number Low level code (LLC) Lead time (LT) Lot size (LS) MRP Matrix Matrix entries Gross requirements Scheduled receipts Projected on hand Planned order receipts Planned order releases 13 MRP Outputs Planned order releases Work for the shop floor Purchase for the suppliers Recommended changes Action notices Rescheduling notices MPR output shows effect of changes on the rest of the system 14 Capacity Requirements Planning (CRP) MRP planned order releases Routing Capacity requirements Open Load pro for each machine center 15 Sec# 12213 5
Load Pro Compares released and planned with work center capacity Capacity machine / labor hours No of machines / workers No of shifts Utilization Efficiency Load work hours / prod units Load percent 16 Load Percent Underload load below 100% Acquiring more work Pulling work ahead of schedule Reducing normal capacity Overload - load above 100% Rerouting jobs or splitting batches between different work centers Increasing normal capacity and/or subcontracting Increasing operational efficiency Pushing work back to later periods 17 MRP II Forecast Aggregate production plan Customer No Feasible? Yes Master production schedule Material requirements Capacity requirements No Feasible? Yes Feedback Purchase Work Inventory Shop floor control Manufacture 18 Sec# 12213 6