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Chapter 12

Chapter 12. Enterprise Resource Planning MRP Video Lecture (MRP A). MRP. Computerized inventory control & production planning system Schedules component items when they are needed - no earlier and no later. 2. When to Use MRP. Dependent and discrete items Complex products

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Chapter 12

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  1. Chapter 12 Enterprise Resource Planning MRP Video Lecture (MRP A)

  2. MRP • Computerized inventory control & production planning system • Schedules component items when they are needed - no earlier and no later • 2

  3. When to Use MRP • Dependent and discrete items • Complex products • Job shop production • Assemble-to-order environments • 3

  4. Material Requirements Planning Product Structure File Inventory Master File MRP Inputs & Outputs Master Production Schedule Planned Order Releases Rescheduling Notices Work Orders Purchase Orders • 4

  5. MRP Inputs • Master production schedule • Product structure file • Inventory master file • 5

  6. Master Production Schedule • Drives MRP process with a schedule of finished products • Quantities represent production not demand • Quantities may consist of a combination of customer orders & demand forecasts • Quantities represent what needs to be produced, not what can be produced • 6

  7. Master Production Schedule • 7

  8. Board (1) Pressboard (1) Finish (2oz.) Product Structure Tree Clipboard Level 0 Clip Assembly(10) Rivet (2) Level 1 Top Clip (1) Bottom Clip (1) Pivot (1) Spring (1) Level 2 Sheet Metal (8 in2) Sheet Metal (8 in2) Spring Steel (10 in.) Iron Rod (3 in.) Level 3 • 8

  9. Indented Bill of Material LEVEL ITEM Unit of Measure Quantity 0 - - - - Clipboard Ea 1 - 1 - - - Clip Assembly Ea 1 - - 2 - - Top Clip Ea 1 - - - 3 - Sheet Metal In2 8 - - 2 - - Bottom Clip Ea 1 - - - 3 - Sheet Metal In2 8 - - 2 - - Pivot Ea 1 - - - 3 - Iron Rod In 3 - - 2 - - Spring Ea 1 - - - 3 - Spring Steel In 10 - 1 - - - Rivet Ea 2 - 1 - - - Board Ea 1 - - 2 - - Press Board Ea 1 - - 2 - - Finish Oz 2 • 9

  10. Specialized BOMS • Phantom bills • transient subassemblies • never stocked • immediately consumed in next stage • K-bills • group small, loose parts under pseudo item # • reduces paperwork • 10

  11. Specialized BOMS • Modular bills • product assembled from major subassemblies & customer options • modular bill kept for each major subassembly • simplifies forecasting & planning • X10 Automobile example 3 x 8 x 3 x 8 x 4 = 2,304 configurations 3 + 8 + 3 + 8 + 4 = 26 modular bills • 11

  12. Modular Bill Of Material X10 Automobile Engines Exterior Interior Interior Body (1 of 3) Color (1 of 8) (1 of 3) Color (1 of 8) (1 of 4) 4-Cylinder (.40) Bright Red (.10) Leather (.20) Grey (.10) Sports Coupe (.20) 6-Cylinder (.50) White Linen (.10) Tweed (.40) Light Blue (.10) Two-Door (.20) 8-Cylinder (.10) Sulphur Yellow (.10) Plush (.40) Rose (.10) Four-Door (.30) Neon Orange (.10) Off-white (.20) Station Wagon (.30) Metallic Blue (.10) Cool Green (.10) Emerald Green (.10) Black (.20) Jet Black (.20) Brown (.10) Champagne (.20) B/W Checked (.10) • 12

  13. Inventory Master File Description Inventory Policy Item Board Lead time 2 Item no. 7341 Annual demand 5,000 Item type Manuf. Holding cost 1 Product/sales class Ass’y Ordering/setup cost 50 Value class B Safety stock 25 Buyer/planner RSR Reorder point 39 Vendor/drawing 07142 EOQ 316 Phantom code N Minimum order qty 100 Unit price/cost 1.25 Maximum order qty 500 Pegging Y Multiple order qty 100 LLC 3 Policy code 3 • 13

  14. Inventory Master File, Con’t. Physical Inventory Usage/Sales On hand 100 YTD usage/sales 1,100 Location W142 MTD usage/sales 75 On order 50 YTD receipts 1,200 Allocated 75 MTD receipts 0 Cycle 3 Last receipt 8/25 Difference -2 Last issue 10/5 Codes Cost acct. 00754 Routing 00326 Engr 07142 • 14

  15. Inventory Accuracy 1. Maintain orderly stockrooms 2. Control access to stockrooms 3. Establish & enforce procedures for inventory withdrawal 4. Ensure prompt and accurate entry of inventory transactions 5. Take physical inventory count on a regular basis 6. Reconcile inventory discrepancies in a timely manner (use cycle counting) • 15

  16. The MRP Matrix • Item • name or number identifying scheduled item • LLC • low-level-code; lowest level at which item appears in a product structure • 16

  17. Parts Of MRP Matrix • Lot size • order multiples of this qty; can be min/max qty • LT (lead time) • time from order placement to receipt • PD (past-due) • orders behind schedule • Gross requirements • demand for item by time period • 17

  18. Scheduled receipts • quantity already on order & receipt date • released orders become scheduled receipts • Projected on hand • expected on-hand inventory at end of period • Net requirements • net amount needed after on-hand adjustments • Planned order receipts • net requirements adjusted for lot-sizing • Planned order releases • planned order receipts offset by lead time • 18

  19. MRP: Problem 1 • A company produces two products: Product A and Product Q. The owner has received an order from a customer of 103 units of product A for week 8 and 200 units of product Q for week 7. The product structures and other pertinent information are given below in the table as well as on top of each MRP table. Develop a materials requirements plan that will provide the customer the two products. • 19

  20. MRP: Problem 1 • 20

  21. Product Structure Item A • 21

  22. Product Structure Item Q • 22

  23. MRP: Problem 1 - Solution • 23

  24. MRP: Problem 1 – Solution (cont.) • 24

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  41. MRP: Problem 1 – Solution (cont.) • 41

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  43. MRP: Problem 1 – Solution (cont.) • 43

  44. MRP: Problem 1 – Solution (cont.) • 44

  45. MRP: Problem 1 – Solution (cont.) • 45

  46. MRP: Problem 1 – Solution (cont.) • 46

  47. Chapter 12 Enterprise Resource Planning MRP Video Lecture (MRP B)

  48. Planned Order Report Item #2740 Date 9-25-02 On hand 100 Lead Time 2 weeks On order 200 Lot size 200 Allocated 50 Safety Stock 50 Order No. Gross Reqs. Scheduled Receipts Projected On Hand Date Action 50 9-26 AL 4416 25 25 9-30 AL 4174 25 0 10-01 GR 6470 50 -50 10-08 SR 7542 200 150 Expedite SR 10-1 10-10 CO 4471 75 75 10-15 GR 6471 50 25 10-23 GR 6471 25 0 10-27 GR 6473 50 -50 Release PO 10-13 Key: AL = allocated CO = customer order PO = purchase order WO = work order SR = scheduled receipt GR = gross requirements • 47

  49. MRP Action Report Current date: 9-25-02 Item Date Order No. Qty. Action #2740 10-08 7542 200 Expedite SR 10-1 #3616 10-09 Move forward PO 10-7 #2412 10-10 Move forward PO 10-5 #3427 10-15 Move backward PO 10-25 #2516 10-20 7648 100 De-expedite SR 10-30 #2740 10-27 200 Release PO 10-13 #3666 10-31 50 Release WO 10-24 • 48

  50. Capacity Requirements Planning (CRP) • Computerized system that projects load from material plan • Creates load profile • Identifies underloads and overloads • 49

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