mrp nigel slack

Slack, Chambers and Johnston, Operations Management, 6th Edition,© Nigel Slack, Stuart Chambers, and Robert Johnston 201014.1

14.1

Chapter 14

Enterprise resource planning (ERP)

Pearson Education Ltd. Devon Obugenga Shaw


14.2

Design

Planning and control

Operations strategy

Improvement



The operation supplies… the informational ability to

deliver products and services

The market requires… specified time, quantity and quality of products

and services


14.3

In Chapter 14 – Enterprise resource planning (ERP) – Slack et al. identify the following key questions:

•What is ERP?

•How did ERP develop?

•How should ERP systems be implemented?

Key operations questions


14.4

Web-integrated enterprise resource planning (collaborative commerce,

c-commerce)


Manufacturing resource planning (MRPII)

Increasing integration of information systems

Incr

ea

sing

imp

act o

n th

e w

hole

sup

ply

n

etw

ork

The development of ERP

Material requirements

planning (MRP)


14.5

The process of MRP1

Explode the master production schedule.

Identify what parts and assemblies are required.

Check whether the required parts and assemblies are available.

For every part or assembly that is required, but not available, identify when work needs to be started for it to be made available by its due date.

Generate the appropriate works and purchase orders.

Repeat the process for the next level of the bill of materials.


14.6

Product

Part A (2) LT=1

Part B (2) LT= 2

Part C (1) LT=1

Part D (1) LT=1

Part E (2) LT= 2

Part F (1) LT= 2

Part G (1) LT=2

Part H (4) LT=1

Part I (2) LT= 2

Part J (1) LT=1

Component structure for a product

Part

ABCDEFGHIJ

On hand inventory

030600

100200

5010060

Order quantities

600600500600600500500500600600(X) = quantity

LT = lead time


14.7 Product structure for a simple board game

Box lid10077

Box base assembly

10089

‘Quest’ cards10023

Character set

10045

Dice10045

TV label10062

Game board10033

Rules10056

Inner tray

23988

TV label10062

Box base

20427

Board game

00289

Level 2

Level 1

Level 0


14.8

A-shape product

structure

T-shape product

structure

V-shape product

structure

X-shape product

structure

Product structures


14.9

Material requirements

planning

Master production schedule

Customer orders

Forecast demand

Bill of materials Inventory records

Purchase orders

Materials plans Works orders

Materials requirements planning (MRP) schematic


14.10


Known orders

Promotion requirements

etc.

Master production schedule (MPS)

Sister plant demand Inventory

levels

Safety stock requirements

R & D demand Spares

demand

Forecast demand

Key capacity

constraints


14.11

Week number

1 2 3 4 5 6 7 8 9

Demand 10 10 10 10 15 15 15 20 20

Available 20 10 0 0 0 0 0 0 0

MPS 0 0 10 10 15 15 15 20 20

On hand 30

Example of a master production schedule


14.12

Week number

1 2 3 4 5 6 7 8 9

Demand 10 10 10 10 15 15 15 20 20

Available 31 32 33 34 30 26 22 13 4

MPS 11 11 11 11 11 11 11 11 11

On hand 30

Example of a ‘level’ master production schedule


14.13

Week number

1 2 3 4 5 6 7 8 9

Demand 10 10 10 10 15 15 15 20 20

Sales orders

10 10 10 8 4

Available 31 32 33 34 30 26 22 13 4

ATP 31 1 1 3 7 11 11 11 11

MPS 11 11 11 11 11 11 11 11 11

On hand 30

Example of a level master production schedule including available to promise


14.14

Inventory file

3 Board games (00289) in stock

Bill of materials

Require 20 box base assemblies (10089)

Inventory file

10 box base assemblies (10089) in stock

Bill of materials

Require 50 box bases (20467), 50 inner trays (23988) and 50 TV labels (10062)

Inventory file

15 box bases, 4 inner trays and 65 TV labels in stock

Level 1

Level 0

Works order for level 0 parts

Assemble 20 Board games (00289)

Works and purchase orders for level 1 parts

Assemble 50 box base assemblies (10089)

Works and purchase orders for level 2 parts

Purchase 40 box bases (20467) and 60 inner trays (23988)


10 Board games (00289) required

Level 2

The MRP netting calculations for the simple board game

= re-order quantity


14.15 Closed-loop MRP

Materials plans Capacity plans

We wish to make 300 units per month

Production plan


Materials plan

We wish to make 7 units for day 35

Therefore we will need to make 5 box assemblies for week 35

Can we make 300 units per month?

Resource requirement

plan

Rough-cut capacity

plan

Capacity requirements

plan

Can we make 7 units for day 35?

Can we make 5 box assemblies for week 35?

realistic?

realistic?

realistic?


14.16 The concept of MRP II

Design

Marketing

Operations

Finance

Central database


14.17

•Because software communicates across all functions, there is absolute visibility of what is happening in all parts of the business.

The benefits of ERP

•The discipline of forcing business-process-based changes is an effective mechanism for making all parts of the business more efficient.

•There is a better ‘sense of control’ of operations that will form the basis for continuous improvement.

•It enables far more sophisticated communication with customers, suppliers and other business partners.

•It is capable of integrating whole supply chains including suppliers’ suppliers and customers’ customers.


14.18

Integrated database

ERP integrates several systems

Purchasing and supply

applications

Operations applications

Financial applications

Strategic reporting

applications Sales and marketing

applications

Delivery and logistics

applications

Service applications

HRM applications

Senior management and stakeholders

Employees

Su

pp

lier

s

Cu

sto

mer

s

Fro

nt-o

ffice

sta

ff

Bac

k-of

fice

staf

f

Employees

mrp nigel slack

Documents

nigel slack

stuart chambers

robert johnston

mrp slack

services slack

operations management

key operations questions

lead time slack