Operations Management - Material Requirements Planning
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The document discusses Distribution Requirements Planning (DRP) and Manufacturing Resource Planning (MRP II), two planning approaches used in operations management. DRP focuses on synchronizing production and demand by translating downstream demand into upstream production decisions, while MRP II expands on this by integrating various functional areas within a manufacturing company for better resource coordination. Both systems aim to optimize materials and production schedules to meet market and company goals.
Operations Management - Material Requirements Planning
- 1. Dept. of MBA, Sanjivani COE, Kopargaon 204 OPERATIONS MANAGEMENT Unit-III – DRP, MRP-II Presented By: Dr. Sanjit Singh Sanjivani College of Engineering, Kopargaon Department of MBA
- 2. Dept. of MBA, Sanjivani COE, Kopargaon Distribution Requirements Planning (DRP) Distribution requirements planning (DRP) – A time-phased planning approach similar to MRP that uses planned orders at the point of demand (customer, warehouse, etc.) to determine forecasted demand at the source level (often a plant).
- 3. Dept. of MBA, Sanjivani COE, Kopargaon Synchronized Planning and Control Figure 12.22
- 4. Dept. of MBA, Sanjivani COE, Kopargaon DRP Example (Snowblowers)
- 5. Dept. of MBA, Sanjivani COE, Kopargaon Downstream Supply Chain Figure 12.23
- 6. Dept. of MBA, Sanjivani COE, Kopargaon DRP Example (Snowblowers) Records are almost identical to MRP records with one exception: Instead of gross requirements, they show forecasted demand. • Forecasted demand – the number of snowblowers each center expects to ship to retail customers each week. Activities at distribution centers are synchronized when the total weekly planned orders become forecasted demand in the factory’s master schedule.
- 7. Dept. of MBA, Sanjivani COE, Kopargaon Impact of Forecast Changes Figure 12.25
- 8. Dept. of MBA, Sanjivani COE, Kopargaon Impact of Forecast Changes • When forecasted demand changes, managers will need to increase the master production schedules accordingly. DRP quickly translates downstream demand into upstream production decisions.
- 9. Dept. of MBA, Sanjivani COE, Kopargaon Synchronizing Plans in the Supply Chain Figure 12.26
- 10. Dept. of MBA, Sanjivani COE, Kopargaon MRP II • Resource Planning is an expansion of closed loop Manufacturing Resource Planning (MRP II) : Developed in 1980s, Manufacturing RP for managing an entire manufacturing company. • This system provides an information that is useful to all functional areas and encourages cross-functional interactions. • It supports sales and marketing by providing and orders promising capability. • It is a broad-based resource co-ordination system involving other areas of a firm in the planning processes, such as marketing, finance and HR.
- 11. Dept. of MBA, Sanjivani COE, Kopargaon
- 12. Dept. of MBA, Sanjivani COE, Kopargaon MRP MRP II MRP is simply about ensuring the materials which are available to manufacture a specific part in a specific volume. It take care of all other aspects of a job including ordering, tracking inventory and ensuring capacity. It takes inputs all in order to make sure you have the right amount of materials/labor/machinery on hand at any given time to satisfy the market or your company production goals. MRP II uses additional data from accounting records and sales for further analysis and forecasting of manufacturing requirements.
- 13. Dept. of MBA, Sanjivani COE, Kopargaon MRP MRP II Stands for Material Requirements Planning. Stands for Manufacturing Resource Planning. Developed in 1970s. Developed in 1980s. Widely used approach for production planning and scheduling in industry. Provides an information that is useful to all functional areas and encourages cross-functional interactions. Aims at releasing and managing manufacturing orders and purchasing requisitions. Aims to control relevant material flows and production capacity while also taking into account the relationship between these material flows and the required capacity.