Material Requirement Planning Presentation.ppt
- 2. Contributors to MRP • Joseph Orlicky • George Plossl • Oliver Wight • American Production and Inventory Control Society
- 3. What is MRP? • Computerized Inventory Control • Production Planning System • Management Information System • Manufacturing Control System
- 4. When to use MRP • Job Shop Production • Complex Products • Assemble-to-Order Environments • Discrete and Dependent Demand Items
- 5. What can MRP do? • Reduce Inventory Levels • Reduce Component Shortages • Improve Shipping Performance • Improve Customer Service • Improve Productivity • Simplified and Accurate Scheduling • Reduce Purchasing Cost • Improve Production Schedules • Reduce Manufacturing Cost • Reduce Lead Times • Less Scrap and Rework • Higher Production Quality
- 6. What can MRP do? • Improve Communication • Improve Plant Efficiency • Reduce Freight Cost • Reduction in Excess Inventory • Reduce Overtime • Improve Supply Schedules • Improve Calculation of Material Requirements • Improve Competitive Position
- 7. Three Basic Steps of MRP • Identifying Requirements • Running MRP – Creating the Suggestions • Firming the Suggestions
- 8. Step 1: Identifying the Requirements • Quantity on Hand • Quantity on Open Purchase Order • Quantity in/or Planned for Manufacturing • Quantity Committed to Existing Orders • Quantity Forecasted
- 9. Step 1: Important Information MRP is….. • Company Sensitive • Location Sensitive • Date Sensitive
- 10. Step 2: Running MRP – Creating the Suggestions • Critical Items • Expedite Items • Delay Items
- 11. Step 3: Firming the Suggestions • Manufacturing Orders • Purchasing Orders • Various Reports
- 12. Overview of the MRP System Product Structure File Master Production Schedule Inventory Master File Material Requirements Planning Manufacturing Orders Purchase Orders Various Reports
- 13. MRP Inputs • Product Structure File • Master Production Schedule • Inventory Master File
- 14. Product Structure File • Bill of Materials
- 15. Master Production Schedule • Schedule of Finished Products • Represents Production, not Demand • Combination of Customer Orders and Demand Forecasts • What Needs to be Produced
- 16. Inventory Master File • On-Hand Quantities • On-Order Quantities • Lot Sizes • Safety Stock • Lead Time • Past-Usage Figures
- 17. MRP Process • Schedules the Production of all items using an MRP Matrix Item: Low-Level Code: Lot Size: Lead Time: PD 1 2 3 4 5 Gross Requirements Scheduled Receipts Projected on Hand Net Requirements Planned Order Receipts Planned Order Releases MRP Matrix
- 18. Terms Defined • Item – name or number for the item being scheduled • Low-Level Code – the lowest level of the item on the product structure file • Lot Size – order multiples of quantity • Lead Time – the time from when an order is placed to when it is received • PD – Past Due Time Bucket, orders behind schedule
- 19. Terms Defined • Gross Requirements – demand for an item by time period • Scheduled Receipts – material already ordered • Projected on Hand – expected ending inventory • Net Requirements – number of items to be provided and when • Planned Order Receipts – net requirements adjusted for lot size • Planned Order Releases – planned order receipts offset for lead times
- 20. Example of the MRP Process Item: A Low-Level Code: 1 Lot Size: 25 Lead Time: 1 PD 1 2 3 4 5 Gross Requirements 10 15 25 25 30 Scheduled Receipts 25 Projected on Hand 20 Net Requirements Planned Order Receipts Planned Order Releases
- 21. Example of the MRP Process Item: A Low-Level Code: 1 Lot Size: 25 min Lead Time: 1 PD 1 2 3 4 5 Gross Requirements 10 15 25 25 30 Scheduled Receipts 25 Projected on Hand 20 10 20 20 20 15 Net Requirements 5 5 10 Planned Order Receipts 25 25 25 Planned Order Releases 25 25 25 30 25
- 22. MRP Outputs • Manufacturing Orders • Purchasing Orders • Various Reports
- 23. Hubbell Lighting Case • Manufactures Industrial Lighting Products • Good-Quality Products • Poor at Meeting Due Dates • Work is Specialized for Each Customer • Job Shop Environment • Complex Products
- 24. Hubbell Lighting Case Before MRP Implementation • Less than 75% of orders completed on time After MRP Implementation • 97% of orders completed on time • 2% of orders completed with 1 to 2 days after due date
- 25. Summary of MRP MRP is a….. • Computerized Inventory Control • Production Planning System that….. • Schedules Component Items as Needed which will….. • Track Inventory and….. • Help you in many other aspects of business
- 26. References Russell, Roberta S., and Bernard W. Taylor III. Operations Management. 3rd Edition: Prentice Hall, 2000 Grubbstrom, Robert W. Material Requirements Planning and Manufacturing Resource Planning. 03/12/2002. http://www.itbp.com/opsmanagement/iebm/material_requirements.htm. Vormittag Associates, Inc. System 2000 MRP. 03/12/2002. http://www.vaihome.com/s2000mrp.htm. Inventory Solutions. What is MRP?. 03/12/2002. http://www.inventorysolutions.org/def_mrp.htm.