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Material Requirement Planning (MRP). Contributors to MRP. Joseph Orlicky George Plossl Oliver Wight American Production and Inventory Control Society. What is MRP?. Computerized Inventory Control Production Planning System Management Information System Manufacturing Control System.

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Presentation Transcript
contributors to mrp
Contributors to MRP
  • Joseph Orlicky
  • George Plossl
  • Oliver Wight
  • American Production and Inventory Control Society
what is mrp
What is MRP?
  • Computerized Inventory Control
  • Production Planning System
  • Management Information System
  • Manufacturing Control System
when to use mrp
When to use MRP
  • Job Shop Production
  • Complex Products
  • Assemble-to-Order Environments
  • Discrete and Dependent Demand Items
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

What can MRP do?
what can mrp do6
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

What can MRP do?
three basic steps of mrp
Three Basic Steps of MRP
  • Identifying Requirements
  • Running MRP – Creating the Suggestions
  • Firming the Suggestions
step 1 identifying the requirements
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
step 1 important information mrp is
Step 1: Important InformationMRP is…..
  • Company Sensitive
  • Location Sensitive
  • Date Sensitive
step 2 running mrp creating the suggestions
Step 2: Running MRP – Creating the Suggestions
  • Critical Items
  • Expedite Items
  • Delay Items
step 3 firming the suggestions
Step 3: Firming the Suggestions
  • Manufacturing Orders
  • Purchasing Orders
  • Various Reports
overview of the mrp system
Overview of the MRP System

Product Structure File

Master Production Schedule

Inventory Master File

Material Requirements Planning

Manufacturing Orders

Purchase Orders

Various Reports

mrp inputs
MRP Inputs
  • Product Structure File
  • Master Production Schedule
  • Inventory Master File
product structure file
Product Structure File
  • Bill of Materials
master production schedule
Master Production Schedule
  • Schedule of Finished Products
  • Represents Production, not Demand
  • Combination of Customer Orders and Demand Forecasts
  • What Needs to be Produced
inventory master file
Inventory Master File
  • On-Hand Quantities
  • On-Order Quantities
  • Lot Sizes
  • Safety Stock
  • Lead Time
  • Past-Usage Figures
mrp process
MRP Process
  • Schedules the Production of all items using an MRP Matrix

MRP Matrix

terms defined
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
terms defined19
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
mrp outputs
MRP Outputs
  • Manufacturing Orders
  • Purchasing Orders
  • Various Reports
hubbell lighting case
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
hubbell lighting case24
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

Hubbell Lighting Case
summary of mrp
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
references
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.