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MRP: Material Requirements Planning Manufacturing Resource Planning

MRP: Material Requirements Planning Manufacturing Resource Planning. Make to Order ( Pull). Initiate production at the moment that a customer places a firm order. Assemble to Order. Pre-produce & store sub-assemblies; finish when customer places order. Make to Stock (Push).

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MRP: Material Requirements Planning Manufacturing Resource Planning

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  1. MRP:Material Requirements PlanningManufacturing Resource Planning

  2. Make to Order (Pull) Initiate production at the moment that a customer places a firm order Assemble to Order Pre-produce & store sub-assemblies; finish when customer places order Make to Stock (Push) Pre-produce and store in anticipation of forthcoming customer orders

  3. JIT (Demand Flow) As needed … “Pull” Low variability High predictability(by definition) Kanban MRP In anticipation … “Push” High variability High predictability (Inventory bufferslow predictability) Computer-intensive JIT / MRP

  4. Materials Requirements Planning (MRP) • How much of an item is needed to meet demand? When? • What parts and components are required? When? • When to order parts and components?

  5. MRPCore Concepts • Dependent Demand • Production (or procurement) of parts and materials is directly linked to demand for the final product • Time-phased Scheduling • Parts and components must be ordered in advance to accommodate lead times between order placement and receipt

  6. MRP Building Blocks • Bill of Material • Hierarchical structure of a product, including quantities • Material - Parts - Components - Sub Assemblies • Routing • Detailed production steps in required sequence • Activity equivalent to BOM • Demand forecast • Independent => Dependent

  7. - + Planned End Inv. Starting Inv. Net Reqs. Gross Reqs. (Demand) = Requirements Planning Determining the levels of inputs needed to produce a desired level of output EXPLODED Bill of Material Requirements extended successively to each level of the bill of material

  8. A 2 1 B(4) C(2) 3 4 3 1 D(2) E(1) D(3) F(2) Materials Requirements Planning (MRP) Lead Times A 1 day B 2 days C 1 day D 3 days E 4 days F 1 day 1 Demand Day 10 50 A Day 8 20 B (Spares) Day 6 15 D (Spares) Create a schedule to satisfy demand.

  9. Day 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50 Lead Time Offset LT = 1 day Demand : When Required Lead Time Offset Manufacturing Order (MO) Purchase Order (PO) ....

  10. A 2 1 B(4) C(2) LT Part(QTY) 3 4 3 1 D(2) E(1) D(3) F(2) Generate Requirements Day 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50 B Required 20 200 Order placement 20 200 Spare Parts BOMExplosion

  11. A 2 1 B(4) C(2) LT Part(QTY) 3 4 3 1 D(2) E(1) D(3) F(2) Day 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50 B Required 20 200 Order placement 20 200 C Required 100 Order placement 100 D Required 40+15 400 300 Order placement 55 400 300 E Required 20 200 Order placement 20 200 F Required 200 Order placement 200

  12. MRP Finishing the Job • Consolidate requirements • By part / material • By due date • Determine economic lot sizes • Order costs • Quantity discounts • Inventory carrying costs • Issue MOs and POs

  13. MRP Key Variables • Forecasts (Independent Demand) • Bill of Material => Dependent Demand • Lead Time (by component) • Ordering Rules (e.g. EOQ)

  14. Key Questions How much of an item is needed to meet demand? When? What parts and components are required? When? When to order parts and components? Key Variables Forecasts (Independent Demand) Bill of Material (Dependent Demand) Lead Time (by component) Ordering Rules (e.g. EOQ) Materials Requirements Planning (MRP)

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