Material Requirement

Planning (MRP1)

DEEPAK KU. KUSHWAHA

MTCH-IND, 12MT07IND009

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Contributors to MRP• Joseph Orlicky(1964)

• Oliver Wight(1983)

• MRP started in the late 1960s. The technique was applied first to mobile and airplane industry. As the technique became well known, many large and small businesses adopted MRP method in order to increase their productivity and decrease the production cost.

INTRODUCTION

• The main function of material requirements planning is to guarantee material availability, that is, it is used to procure or produce the required quantities on time both for internal purposes and for sales and distribution.

• This process involves

- monitoring of stocks,

- automatic creation of procurement proposals for

purchasing and production.

• In doing so, MRP tries to strike the best balance possible between

- optimizing the service level and

-minimizing costs and capital lockup.

MRP is

• Production Planning System

• Computerized Inventory Control

• Management Information System

• Manufacturing Control System

MRP software- Tuppus, Eci M1, E2 shop system

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MRP system Gives answer

• What items are required?

• How many are required?

• When are they required?

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Objectives• Materials and products are available for

production and delivery to customers.

• Maintain the lowest possible level of inventory.

• Plan manufacturing activities, delivery schedules and purchasing activities.

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When to use MRP?

It is useful for…..

• Independent Demand vs Dependent Demand

• Lumpy demand

• Lead time( order lead time, manufacturing lead time )

• Common use items

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PRODUCTIONPLANNING

PRODUCTIONPLANNING

CAPACITY

WORK FORCE

PRODUCTION

INVENTORY

INTERNAL

EXTERNAL

EXTERNALCAPACITY

COMPETITIONRAW MATERIAL

SUPPLYDEMAND

ECONOMICCONDITIONS

Production Planning Environment

Overview of the MRP System

Product Structure

File

Master Production Schedule

Inventory Master File

Material Requirements

Planning

Manufacturing Orders

Purchase Orders

Various Reports

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MRP Inputs

• Master Production Schedule

• Product Structure File

• Inventory Master File

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Master Production Schedule

• A master schedule is the result of disaggregation of an aggregate plan.

• A master schedule show the quantity & timing of specific end item for a time horizon.

• Schedule of Finished Products• Represents Production, not Demand• Combination of Customer Orders and Demand

Forecasts• What Needs to be Produced

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Product Structure File

• It shows diagrammatically the component required

to assemble it,their no,& the sequence of assembly.

Bill of Material(BOM)

Documentation of product structure.

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Bicycle(1)Level 0

Handle Bars (1)Level -1

Frame Assembly (1)Level-1

Wheels (2)Level -2

Frame (1)Level-2

Product Structure Tree

Product structure & BOM

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Bicycle(1)

Level 0

Handle Bars (1)Level -1

Frame Assembly (1)Level-1

Wheels (2)Level -2

Frame (1)

Level-2

Item no. Level product Lead time part code Quantity1 level 0 bicycle P/N 1000 102 level 1 handle bar 1wk P/N 1002 103 level 1 frame ass. 1wk P/N 1023 104 level 2 wheel 2wk P/N 1045 205 level 2 frame 2wk P/N 1034 10

Inventory Master FileA database of information contain• Raw material & purchased component.

• In process inventory

• Finished product

• Lot Sizes

• Safety Stock

• Lead Time

• Past-Usage Figures16

MRP Outputs

• Planned order report1. Time for order(Lead time)

2. Helps in preparing founds.

• Order release report1. Order size*, release date.

2. Purchase order taking care of lead time.

• Order change report1. Changing demand ,order,leadtime.

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Order size in MRP

Lot for lot method

EOQ methd

Least total cost method

Least unit cost method

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MRP PROCESS

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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

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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

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MRP formatItem: A Low-Level Code: 1

Lot Size: 25 Lead Time: 1PD 1 2 3 4 5

Gross Requirements

Scheduled Receipts

Projected on Hand

Net Requirements

Planned Order Receipts

Planned Order Releases

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MRP PROCESS

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Master production schedule for item APeriod(w) 1 2 3 4 5 6 7 8gross requirement 450 600

MRP report for item BA LT=1WeekPeriod in weeks 1 2 3 4 5 6 7 8Gross requirement 450 600Schedule receiptsProject on hand 100 100 100 100Net requirement 350 600Planned order recepits 350 600Planned order release 350 600

• GROSS REQUIREMENT OF COMPONENT B=2*350=700

• GROSS REQUIREMENT OF COMPONENT C=1*350=350

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A(1)

LT=1

B (2)

LT=1

C(1)

LT-1

Product structure file

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Master production schedule for item APeriod(w) 1 2 3 4 5 6 7 8gross requirement 450 600

MRP report for item BA ,LT=1WeekPeriod in weeks 1 2 3 4 5 6 7 8Gross requirement 450 600Schedule receiptsProject on hand 100 100 100 100Net requirement 350 600Planned order recepits 350 600Planned order release 350 600

MRP report for item BB,LT=1weekPeriod in weeks 1 2 3 4 5 6 7 8Gross requirement 700 1200Schedule receiptsProject on handNet requirement 700 1200Planned order recepits 700 1200Planned order release 700 1200

MRP report for item BC,LT=2weekPeriod in weeks 1 2 3 4 5 6 7 8Gross requirement 350 600Schedule receiptsProject on handNet requirement 350 600Planned order recepits 350 600Planned order release 350 600

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

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Limitation of MRP

• No account of capacity(deal with MRP=II)

• Data sensitive

• Lead time

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Case study

PAL MOHAN ELECTRONIX PVT. LIMITED , DELHI produces a line of electric meters installed in residential buildings by electric utility companies to measure power consumption. Meters used on single-family homes are of two basic types for different voltage and amperage ranges. In addition to complete meters, some parts and subassemblies are sold separately for repair or for changeovers to a different voltage or power load. Forecasting demand

•The problem for the MRP system is to determine a production schedule that would identify each item, the period it is needed, and the appropriate quantities.

•This schedule is then checked for feasibility, and the schedule is modified if necessary.

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Structure of the study

Section 1. Master Production ScheduleSection 2. Bill of Materials (Product Structure) FileSection 3. Inventory Records (Item Master) FileSection 4. Running the MRP ProgramSection 5. Obtainability control

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Section 1. Master Production Schedule

Forecasting demand

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Section 2. Bill of Materials (Product Structure) File.

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Section 3. Inventory Records (Item Master) File

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Section 4 . Running the MRP Program

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Section 5-Obtainability Control

• ROUGH-CUT CAPACITY PLANNING(MRP-2)

• PREPARE REPORT

•It should have to be asked after applying the MRP that whether the MRP schedule was feasible or not. If it is not so, then the new revised MPS has to be applied with MRP packages

Refernce

• Cad/Cam-Mikell P. Groover

• Automation & production,CIM-Mikell P. Groover

• wikipedia.org/wiki/Material requirements planning

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Query session

Thank You

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