Submitted to: Submitted by: Mansi Saxena Vishakh Kumar Sachin Kumar

Vishal Kumar & Rajdeep

A-3

Contents of Presentation

Relevance of the material requirement planning.

MRP system inputs &output

Role in production

Advantage disadvantage

1 2 3 4 5

Gross Requirements 2 20 25 15

Scheduled Receipts 5 30

Available 25 23 33 33 8

Net Requirements 7

Planned Order Receipts 7

Planned Order Releases 7

1 2 3 4 5

Gross Requirements 2 20 25 15

Scheduled Receipts 5 30

Available 25 23 33 33 8

Net Requirements 7

Planned Order Receipts 7

Planned Order Releases 7

Manufacturing computer information system

Determines quantity & timing of dependent demand items

Material Requirements Planning (MRP)

Material requirements planning

Materials Requirements planning : Computer based information system for ordering and scheduling of dependent demand inventories.

A manufacturing company to produce end items to meet demand the availability of sufficient capacity must be co-ordinate with the availability of all raw material

Function of MRP

Order planning and control

Priority planning and control

Providing a basis for planning capacity requirement

MRP depend on some factor

Cost estimateOrder entryInventory control Bill of materialPurchasingManufacturing floor control and schedulinginvoicing

Material requirement planning five stage

Target and marketing

Development of offering

Sales

Superior experience

Retention and win back

Change in product design and product structure

MRP New design in corporation data

Functional input Functional output

What MRP does

END ITEM

MRP

RAW MATERIAL &COMPONENTS

Used in the end product

Detail schedule for

Master schedule for

Operation of MRP system

Inputs process outputs

Inventory status file

MPS file

B.O.M. file

Inventory transaction data

Planned order schedule

Exception reports

MRP

Inventory

Process stage

Demand Type

Number & Value Other

Raw Material WIP Finished

Goods

Independent Dependent

A Items B Items C Items

Maintenance Dependent Operating

Inventory Classifications

Typical Focus of the Master Production Schedule

Make to Order

(Process Focus)

Assemble to Order or Forecast

(Repetitive)

Stock to Forecast(Product Focus)

Schedule finished product

Steel, Beer, Bread Light bulbs, Paper

Print shopMachine shop

Fine dining restaurant

Examples:

Number of end items

Number of inputs

Typical focus of the master production

schedule Schedule orders

Schedule modules

Motorcycles, autos, TVs, fast-food

restaurant

Structure of the MRP System

MRP by period report

MRP by date report

Planned orders report

Purchase requirements

Exception reports

MRPPrograms

Master ProductionScheduleBOM

Lead Times

(Item Master File)

(Bill-of-Material)

Inventory Data

Purchasing data

The Planning ProcessProduction Plan

Execute MaterialPlans

Master ProductionSchedule

MaterialRequirements

Plan

CapacityRequirements

Plan

Execute CapacityPlans

Realistic??No

Yes

Purpose of MRP

Control inventory level Assign operating priorities Assign capacity to load production system

The theme of MRP is the “getting the right

materials to the right place at the right time in right quantities”.

Effect on MRP

End productUsually forecastConventional inventory control applicableRaw material Component partssubassemblies

Objective of MRP

To improve customer service by meeting delivery schedules promised and shortening delivery lead times

To reduce inventory costs by reducing inventory levels

To improve plant operating efficiency by better use of productive resource

Three factor of MRP technique

The MRP technique as a requirements calculator

The MRP A manufacturing ,planning and control system

The MRP A manufacturing resource planning system

Why requirement of MRP

How can we increase the production

How can we more utilization of the things

How can we improve the quality

How can we give the best services

For increase the profit

Independent and Dependent Independent and Dependent DemandDemand

Independent Demand

A

B(4) C(2)

D(2) E(1) D(3) F(2)

Dependent Demand

Independent demand is uncertain. Dependent demand is certain.

Item Materials WithIndependent Demand

Materials WithDependent Demand

DemandSource Company Customers Parent Items

MaterialType Finished Goods WIP & Raw Materials

Method ofEstimatingDemand

Forecast & BookedCustomer Orders

Calculated

PlanningMethod EOQ & ROP MRP

Dependent versus Independent Demand

Implementation of MRP

Management commitmentUser involvement Education and training Selection of packages Data accuracy Realistic MPS

Computer systemMainly discrete productsAccurate bill-of-materialAccurate inventory status

99% inventory accuracy

Stable lead times

© 1984-1994 T/Maker Co.

MRP Requirements

Bicycle(1)P/N 1000

Handle Bars (1)P/N 1001

Frame Assembly (1)P/N 1002

Wheels (2)P/N 1003

Frame (1)P/N 1004

Bill-of-Material Product Structure Tree

Example

Right side

middleLeft side

scissors SC

R Qty: 1

M Qty: 1 L Qty: 1

M Qty: 2 R Qty: 1 L Qty: 1

SC

ExampleExampleChair

Seat

Legs (2) Crossbar

SideRails (2)

Crossbar

BackSupports (3)

LegAssembly

BackAssembly

Level 0

1

2

3

Gross requirement for a period

_

On hand Inventory at the end ofthe period

Schedule receipt for the period

+ = Net requirement for a period

MRP Input

order qty =70 week

lead time =4 week 1 2 3 4 5 6 7 8 9 10 11 12

safety stock40

project requirement 20 20 25 20 20 25 20 20 30 25 25 25

scheduled receipts 70 70 70 70

on hand at the end of period 65 45 95 70 50 100 75 55 105 75 50 95 70

planned order release 70 70 70

Example of MRP

Some Example

If Maruti suzuki decided 1000 units of alto cars model (finished goods ) dec2009 based on forecast

Dell computer manufacture who

planned to produce 10000 units of desk top

Sony Eric son mobile company is planning to produce 50000 units of mobile with camera 4.0 mega pixel capacity

Advantage of MRP

Reduced idle timeReduced set up timeBetter customer servicesBetter response to market demandsHelps managers to use the planned

schedule

Disadvantage of MRP

Lack of top management commitment

MRP was presented and perceived as a complete and stand alone system to run a firm rather than as part of the total system

MRP can be made to function with just in time production system

Problem in using MRP

Preparation of MPSMaintaining accurate of B.O.M. filesIn correct stock (inventory ) status Unrealistic lead times