MRP Systems

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MRP Systems
MRP Material Requirements Planning Commonly
used method in industry to coordinate the
production scheduling of end items and their
associated sub components. Fords MRP systems is
known as CMMS, common manufacturing management
system.
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MRP Systems
End Item final product that is to be shipped
from the manufacturing facility (engine by engine
code, replacement engine blocks, replacement
crankshafts, etc) General Idea A desired
production date for end-items is known, the
inventory level of all components and
sub-assemblies required by the end-item is known,
the lead time to produce the subcomponents or
delivery time of supplied parts is known,
therefore scheduled the production of any
shortfall of parts and subcomponents at a point
in time to support the desired production date of
the end-item.
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MRP Systems

• Required information to support an MRP system
• Master Production Schedule (MPS)
• Bill of Material (BOM)
• Inventory Status Records by each part or
  component
• Lead times
• Item master data

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MRP Systems
Master Production Schedule (MPS) Planned
production quantities for end-items in each time
period of the planning horizon. Planning horizon
length of time over which to plan the
production schedule. This length of time must
exceed the cumulative lead time to replenish an
end-item through all production stages. Time
period (or time bucket) smallest unit of time
in which end-item production is schedule. In
practice, time buckets of one week are typical
used.
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MRP Systems
Master Production Schedule (MPS)
Example Production of 1000 no. 12468
staplers is planned for weeks 1, 2, and 3,
followed by no more stapler production until week
6 in which 1500 staplers will be produced.
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MRP Systems
Bill of Material (BOM) A listing of all
components required for each end-item. Example
personal stapler no. 12468. This stapler is
assembled from 3 sub-assemblies. Insert Figure
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MRP Systems
Inventory Status Records Dynamic information
about the current level of inventory for all
components designated in the BOM of each end
item. In practice, accurate inventory levels are
difficult to maintain. Example Component Invento
ry Status Top Assembly 1212 Spring
Assembly 1150 Locator Plate 146 Slide
Pin 558
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MRP Systems
Lead Times the time from when an order to
replenish a part is initiated until the part
becomes available for use. Lead times in practice
are variable, but for the MPS, a fixed value is
applied, usually the mean plus some safety
factor. Example Component Lead Time
(weeks) Top Assembly 1 Spring
Assembly 1 Locator Plate 2 Slide Pin 1
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MRP Systems

• Item Master Data - unique data for each part or
  component. This data includes
• unique part number
• annual demand
• nominal order quantity
• cost
• scrap rate
• production lead time
• resource requirements
• pointers to engineering drawings (if produced
  internally)
• vendor information (if purchased)
• etc

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MRP Systems
Requirements explosion and order release
plan Example order release plan for personal
stapler no. 12468 Level One Planning Top
Assembly
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MRP Systems
Requirements explosion and order release
plan Example order release plan for personal
stapler no. 12468 Level One Planning
Spring Assembly
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MRP Systems
Requirements explosion and order release
plan Ex. order release plan for personal
stapler no. 12468, an order for 750 locator
plates is expected to arrive early in week
1 The 892 units released in week 1 will
not arrive till week 3 unless some expedited
actions occur Level Two Planning Spring
Assembly
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MRP Systems
Requirements explosion and order release
plan Ex. order release plan for personal
stapler no. 12468, a batch of 650 slide pins is
just about complete. Level Two Planning
Spring Assembly
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MRP Systems
Recall the requirements explosion and order
release plan from Ex. order release plan for
personal stapler no. 12468 How might you
allow for quality losses and or demand
variability and lead-time variability?
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MRP Systems
Scrap losses recall on the item master data
record, quality yield is a field which has been
populated using historical data or a guess. If
yield for the stapler top assembly is say 90,
then more units should be planned for release
than are required for the planned end-items
according to Ex. If there is a 90 yield for
for top assembly then
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MRP Systems
Safety Stock and Safety Lead Time to protect
against demand variability and lead time
variablity, a safety factor may be applied.
Numerous application a safety factors exist, the
simplest may be multiply by some percentage.
Ex. If a 15 safety factor has been identified
for top assembly then
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MRP Systems
Rough-Cut Capacity Planning When developing an
MPS, one must consider if the schedule is
feasible based on the capacity of workcenters
within the plant. This is performed by
determining the number of hours impact on all
workcenters required to produce the end item, and
identified by time bucket.
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MRP Systems
Rough-Cut Capacity Planning For example,
suppose for every unit of end item A that is
planned for production, the following workcenters
are impacted Insert figure Part C has a
2-week lead time, and uses both workcenter 200
and 300. Part D consists of part E which
requires WC 300 and part F (a purchased
component).
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MRP Systems
Rough-Cut Capacity Planning An aggregated, time
phased profile for end item A and another end
item B is shown below. Insert fig
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MRP Systems
Rough-Cut Capacity Planning Given a master
production schedule for the facility  And
the time-phased load profile, results in the
total resource requirements
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MRP Systems
Rough-Cut Capacity Planning Given this rough
cut capacity plan, and the knowledge that you
operate a single shift 10 hours a day, and 6 days
a week, do you foresee a problem? If so, how
might you adjust?
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MRP Systems
Capacity Requirements Planning (CRP) Similar to
rough cut capacity planning, but includes details
such as current inventory levels and the impact
of lot-sizing decisions. Ex. Assume initial
inventory levels Then net MPS becomes
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MRP Systems
Capacity Requirements Planning From the net
MPS, the workstation loading levels by
part Therefore capacity plan is Are
there any concerns?