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07mfg60s-MRP

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07mfg60s-MRP

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    Insert Tab Here Unit 7Material Requirements Planning

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    Unit 7Material Requirements Planning

    Unit Introduction ........................................................................................................ 1

    Objectives ............................................................................................................. 1 Terminology .......................................................................................................... 1

    Material Requirements Planning................................................................................ 2

    MRP II and Material Requirements Planning ....................................................... 2

    Reorder Point ....................................................................................................... 3 Material Requirements Planning .......................................................................... 4 Material Requirements Planning Integration ........................................................ 6

    Material Requirements Planning Process Flow .................................................... 7

    Material Requirements Planning Inputs ............................................................... 8

    MRP Planning Controls ........................................................................................ 9

    Scrap and Yield Factors ................................................................................ 10

    Phantom Items .............................................................................................. 12 MRP Requirements Generation ......................................................................... 13

    Elements of Material Requirements Planning ............................................... 14

    Calculating MRP Net Requirements ............................................................. 16 Netting Process .................................................................................................. 17 Material Evaluation Process ............................................................................... 18 Material Status Prior to Allocation ...................................................................... 20 Material Status After Allocation .......................................................................... 21 MRP Reports and Inquiries ................................................................................ 22

    Planning and Pegging Inquiry ....................................................................... 22

    MRP Planning Report ................................................................................... 22

    Shop Order Rescheduling ............................................................................. 22

    Purchase Order Rescheduling ...................................................................... 22

    Material/Capacity Availability ........................................................................ 22 Schedule Adjustment .......................................................................................... 23 System Nervousness .......................................................................................... 23

     Table of Contents 7-i

    Simulation ................................................................................................................ 24 Material Requirements Planning Review ................................................................. 26 List of Figures

    Figure 7 - 1. MRP II and Material Requirements Planning Integration ..................... 2

    Figure 7 - 2. Reorder Point ....................................................................................... 3 Figure 7 - 3. Material Requirements Planning .......................................................... 4 Figure 7 - 4. Material Requirements Planning Integration ........................................ 6 Figure 7 - 5. Material Requirements Planning Process ............................................ 7 Figure 7 - 6. Material Requirements Planning Inputs ................................................ 8 Figure 7 - 7. Scrap and Yield Example ................................................................... 10 Figure 7 - 8. Phantom Item...................................................................................... 12 Figure 7 - 9. MRP Requirements Generation .......................................................... 13 Figure 7 - 10. Netting Process ................................................................................ 17 Figure 7 - 11. Pegging ............................................................................................ 18 Figure 7 - 12. Pegging Example .............................................................................. 19 Figure 7 - 13. Status Without Allocation ................................................................. 20 Figure 7 - 14. Status With Allocation ...................................................................... 21

7-ii Manufacturing WorkshopStudent Guide

Unit Introduction

    This section covers Material Requirements Planning (MRP). It is closely related to Master

    Production Scheduling (MPS) which was covered in the previous section. Material

    Requirements Planning is part of Operations Management Planning.

    Objectives

    At the end of this unit you will be able to:

    ? Generate a Material Requirements Plan.

    ? Adjust Master Schedule according to Material Requirements Plan results received. Terminology

    Calculating demand for components of a parent item. Explosion

    Ability to identify source of demand for an item. Pegging

    BPCS product supporting job requirements of production Planners Assistant

    and material planners.

    Set inventory level where action is taken to replenish stock. Reorder Point

    Anticipated loss within manufacture of product. Scrap

    Performing what if evaluations of alternate plans. Simulation

    Ratio of usable output from a process to its input. Yield

     Material Requirements Planning 7-1

Material Requirements Planning

    Material Requirements Planning (MRP) calculates material needed to meet the Master

    Production Schedule.

    MRP II and Material Requirements Planning

    The figure below highlights Material Requirements Planning (MRP) in the Manufacturing

    Resource Planning (MRP II) process. Material Requirements Planning (MRP) is part of

    Operations Management Planning and is considered medium-range planning. Material

    Requirements Planning is generated from outputs of the Master Production Schedule, is used

    in conjunction with Capacity Planning (CAP), and provides inputs to Purchasing (PUR) and

    Production Activity Control (PAC).

    Business Planning

    AccountsSales PlanningSales PlanningOrderOrderForecastingReceivableProcessingPlanningForecastingProcessingItemBillsMaster

    Production PlanningBill ofIResourcesN

    GeneralVRough CutMasterLedgerBills ofCapacityProductionEMaterialPlanningSchedulingN(Configurable)DepartmentsTMaterialCapacityWorkORequirementsRequirementsCentersPlanningPlanningRRoutingsYFinite ForwardAccountsSchedulingCostPayableStandardsCostProductionActualsAccountingActivityPurchasingControl

    PerformanceMeasurement

    Figure 7 - 1 MRP II and Material Requirements Planning Integration 7-2 Manufacturing WorkshopStudent Guide

Reorder Point

    A reorder point is a set inventory level where action is taken to replenish stock. This is a

    traditional method for maintaining, and replenishing inventory.

    Reorder point:

    ? Assumes uniform standard usage

    ? Does not account for dependent demand

    ? Based on historical usage

    ? Results in excessive inventory

    ? Does not perform priority planning

    The figure below illustrates reorder point concepts.

    75

    Reorder Point

    50

    QUANTITY

    25

    Safety Stock or Minimum Balance

    0123456789101112

    TIMELead Time

    Figure 7 - 2 Reorder Point

     Material Requirements Planning 7-3

Material Requirements Planning

    Material Requirements Planning (MRP) is a priority planning technique that uses bill of

    material data, inventory data, and the master production schedule to calculate material

    requirements. It is used to plan inventory by stating what to order, how much to order, and

    when to order.

    Material Requirements Planning:

    ? Accommodates non-standard usage

    ? Based on dependent demand

    ? Decreases inventory investment

    ? Orders supply only when needed

    ? Allows priority planning

    The Material Requirements Planning concept is shown in the figure below.

    75

    Planned Order

    ReleaseOrder

    Quantity

    50Planned OrderQUANTITYReceipt

    25

    Safety Stock or Minimum

    Balance

    1 2 3 4 5 6 7 8 9 11120 10

    TIME

    Lead TimeLead time = 2 periods

    Safety Stock = 25 pcs.

    Order Policy Code = A (Discrete)

    Figure 7 - 3 Material Requirements Planning

    7-4 Manufacturing WorkshopStudent Guide

Material Requirements Planning (MRP) is a tool that uses one consistent set of manufacturing

    data to plan and execute the material aspects of the manufacturing process. MRP converts the

    Master Production Schedule into time-phased requirements for each item required to execute

    the plan.

     Material Requirements Planning includes the following:

    ? A plan reflecting the physical reality of the factory is critical to a successful MRP ? Changes made in either the system or the manufacturing process must be reflected in both ? Solutions to the following:

    ? Lack of synchronization encourages the growth of informal systems

    ? People do not use a system they cannot understand or don’t believe

    MRP prerequisites and inputs include:

    ? A valid, realistic Master Production Schedule

    ? Forecast and/or customer orders for independent service items

    ? An accurate Item Master with the appropriate planning data

    ? Accurate bills of material or formulas

    ? Accurate inventory status information

    The MRP Netting Process:

    ? Performs a gross to net calculation for each item and all levels in the bill of material ? Consolidates requirements for each item from all sources

    ? Calculates projected status of each item and presents it by period for planner analysis

     Material Requirements Planning 7-5

Material Requirements Planning Integration

    The figure below illustrates integration points between Material Requirements Planning

    (MRP) and other BPCS products.

    MasterConfigurable

    ProductionOrderSchedulingManagementMPSCOM

    SystemFeatures and options,ForecastParametersDemand and requirementskits and assortmentsFORSYS

    PlanningForecastparametersand explosion

    QuantityComponentMaterialCapacityof criticalInventoryusage andresources forRequirementsPlanningitem detailsINVMPS itemsPlanningCAP

    ItemProductionProductDetailsmaterial andcostingallocation

    Bill ofPurchasingMaterialPURShop FloorBOMControl/

    Just-In-Time

    SFC/JIT

    Figure 7 - 4 Material Requirements Planning Integration

    7-6 Manufacturing WorkshopStudent Guide

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