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13 - Manufacturing Resource Planning

13 - Manufacturing Resource Planning. Dr. Ron Tibben-Lembke. Historical Perspective. ERP- Enterprise Resource Planning. MRP II – Manufacturing Resource Planning. mrp – material requirements planning . MRP Crusade (1975). Material Requirements Planning

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13 - Manufacturing Resource Planning

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  1. 13 - Manufacturing Resource Planning Dr. Ron Tibben-Lembke

  2. Historical Perspective ERP- Enterprise Resource Planning MRP II – Manufacturing Resource Planning mrp – material requirements planning

  3. MRP Crusade (1975) • Material Requirements Planning • Make sure you have enough parts when you need them • Take future demands, factor in lead times (time phase), compare to on hand, order • Determine order size and timing • Control and plan purchasing vs. OSWO inventory management

  4. Closed-Loop MRP • Capacity Consideration: • Part routings • Calculate loads on each work station • See if scheduled load exceeds capacity • Lead-time long enough to allow some shuffling to make plan feasible

  5. MRP II -- Manufacturing Resource Planning • “A method for the effective planning of all resources of a manufacturing company” (APICS def.) • Financial accounting incorporated • Sales • Operations Planning • Simulate capacity requirements of different possible Master Production Schedules • 1989, $1.2B MRPII sales in U.S., one third of total software sales

  6. Success? MRP Crusade Begins

  7. Electronic Data Interchange • My computer talks to yours, tells you exactly what I want to order, when • You fill out a form, very compressed message sent, viewed as form • Software, hardware expensive to implement Sample Purchase Transaction ST88850*1 Transaction Set identifier BEG*00*NE*00498765**010698 Beginning of Segment PID*X*08*MC**Large Widget Description of Product P01**5*DZ*4.55*TD Baseline Item Data CTT*1 Transaction Totals SE*1*1 End of Segment

  8. XML • eXtensible Markup Language • XML provides self-describing information. • Much easier, faster to implement or modify than EDI. • Expected to replace EDI. • Standardization through RosettaNet efforts

  9. ERP differences • Material planning • Capacity planning • Product design • Information warehousing • All functions in the entire company operate off of one common set of data • Instantaneous updating, visibility

  10. Historical Perspective Database Server(s) Application Server(s) User PCs

  11. ERP Sales • Worldwide sales of top 10 vendors • 1995 $2.8 B • 1996 $4.2 B • 1997 $5.8 B $3.2 B SAP • Fortune survey: 44% reported spending at least 4 times as much on implementation as on software

  12. ERP Challenges • Modules assume “best practices:” • Change software to reflect company ($) • Change company to follow software (?) • Accuracy of data • Drives entire system • Ownership of / responsibility for • Ability to follow structure

  13. ERP Novel? • “Goal-like” novel • Hero learns more about ERP, deciding if it is right for his company • Company rushes through installation • General introduction to ERP systems, what they do, how different from MRP • SAP R/3 screen shots

  14. 3 Reasons for ERP • Legacy systems outdated and need replacing anyway • Desire for greater communication between locations • Reconfigure business to take advantage of current and future communications and computing breakthroughs

  15. Why ERP? Multiple Clients Multiple Processes Multiple Clients Mostly “Best Practices” Common Client Multiple Processes High Low Flexibility Common Client “Best Practices” High Low Centralization

  16. ERP Considerations 1. Control: how much centralization, drill-down visibility? 2. Structure: How large & dispersed, how tightly integrated does it need to be? 3. Database: desired structure, accessibility 4. Customization: out/in source, how willing? Ability to modify in real time. Creating in-house experts vs. continued consulting dependence 5. Best practices: how willing to embrace? Source: Carol A. Ptak “ERP: Tools, Techniques and Applications for Integrating the Supply Chain,” St. Lucie Press, APICS Series on Resource Management, 1999, p. 252.

  17. How do we • System for organizing WIP releases • Consider LT for each item • Look at BOM to see what parts needed • Release so they will arrive just as needed • Example – Snow Shovel • Order quantity is 50 units • LT is one week

  18. MRP Table 6 units short

  19. MRP Table Order 50 units week earlier

  20. Ending Inventory Ending inventory

  21. Terminology • Projected Available balance • Not on-hand (that may be greater) • Tells how many will be available (in ATP sense) • Planned order releases ≠ scheduled receipts • Only when material has been committed to their production • Move to scheduled receipts as late as possible • Preserves flexibility

  22. 1605 Snow Shovel 1605 Snow Shovel 062 Nail (4) 13122 Top Handle Assy 048 Scoop-shaft connector 14127 Rivet (4) 314 scoop assembly 118 Shaft (wood)

  23. 314 scoop assembly 314 scoop assembly 019 Blade (steel) 14127 Rivet (6) 2142 Scoop (aluminum)

  24. 13122 Top Handle Assembly 13122 Top Handle Assembly 11495 Welded Top handle bracket Assembly 457 Top handle (wood) 1118 Top handle Coupling (steel) 129 Top Handle Bracket (steel) 082 Nail (2)

  25. BOM Explosion • Process of translating net requirements into components part requirements • Take into account existing inventories • Consider also scheduled receipts

  26. BOM Explosion Example • Need to make 100 shovels • We are responsible for handle assemblies.

  27. 13122 Top Handle Assembly 13122 Top Handle Assembly 11495 Welded Top handle bracket Assembly 457 Top handle (wood) 1118 Top handle Coupling (steel) 129 Top Handle Bracket (steel) 082 Nail (2)

  28. Net Requirements Sch Gross Net Part Description Inv Rec Req Req Top handle assy 25 -- 100 75 Top handle 22 25 Nail (2 required) 4 50 Bracket Assy 27 -- Top bracket 15 -- Top coupling 39 15

  29. Net Requirements Sch Gross Net Part Description Inv Rec Req Req Top handle assy 25 -- 100 75 Top handle 22 25 75 28 Nail (2 required) 4 50 150 96 Bracket Assy 27 -- 75 48 Top bracket 15 -- Top coupling 39 15

  30. 13122 Top Handle Assembly 13122 Top Handle Assembly 11495 Welded Top handle bracket Assembly 457 Top handle (wood) 1118 Top handle Coupling (steel) 129 Top Handle Bracket (steel) 082 Nail (2)

  31. Net Requirements Sch Gross Net Part Description Inv Rec Req Req Top handle assy 25 -- 100 75 Top handle 22 25 75 28 Nail (2 required) 4 50 150 96 Bracket Assy 27 -- 75 48 Top bracket 15 -- 48 33 Top coupling 39 15 48 --

  32. Timing of Production • This tells us how many of each we need • Doesn’t tell when to start • Start as soon as possible? • Dependent events (oh no, not that!) • Front schedule Cutting approach • Back schedule

  33. 13122 Top Handle Assy

  34. 13122 Top Handle Assy-2

  35. 13122 Top Handle Assy -3

  36. 457 Top Handle One handle for Each assembly

  37. 457 Top Handle

  38. 457 Top Handle

  39. 082 Nail (2 required) Two nails for Each assembly

  40. 082 Nail (2 required)

  41. 082 Nail (2 required)

  42. 082 Nail (2 required)

  43. 11495 Bracket Assembly One bracket for Each assembly

  44. 11495 Bracket Assembly One bracket for Each assembly

  45. 11495 Bracket Assembly One bracket for Each assembly

  46. 11495 Bracket Assembly

  47. 129 Top Bracket

  48. 129 Top handle bracket

  49. 1118 Top handle coupling

  50. 1118 Top handle coupling

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