MATERIAL AND CAPACITY REQUIREMENTS PLANNING

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MATERIAL AND CAPACITY REQUIREMENTS PLANNING

• Material Requirements Planning Basics
• MRP In An Uncertain Environment
• Capacity Requirements Planning

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CORE MRP II
MANUFACTURING RESOURCE PLANNING
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MATERIAL REQUIREMENTS PLANNING BASICS

• Dependent Versus Independent Demand
• MRP Versus MRP II
• The MRP Record
• Bills Of Materials Low-level Coding
• Vertical Linkage Of MRP Records

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INDEPENDENT VERSUS DEPENDENT DEMAND

• Demand for a finished product is independent of
  all other parts/products
• Demand for a component part is dependent on some
  other parts/products
• Material planning is concerned with planning to
  meet dependent demand

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MRP VERSUS MRP II

•  In the beginning
•  There were no computers
•  Material planning was done independently for
  each component
• Then there were primitive computers
• And MRP became possible
• Then there were faster computers
•  And closed-loop MRP (proto-MRP II) became
  possible
• Now there are even faster computers
• And we have ERP

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THE MRP RECORD

• Gross requirements dependent "demand" for a
  part

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THE MRP RECORD

• Planned order releases -- start time for a new
  batch

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THE MRP RECORD

• To get from gross requirements to planned order
  releases we need to know what's available

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THE MRP RECORD

• To get from gross requirements to planned order
  releases we need to know what's available
•  Scheduled receipts -- work-in-process

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THE MRP RECORD

• To get from gross requirements to planned order
  releases we need to know what's available
• Scheduled receipts -- work-in-process
• Beginning inventory

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THE MRP RECORD

• Project inventory balances forward to determine
  when net requirments occur

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THE MRP RECORD

• Project inventory balances forward to determine
  when net requirments occur

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THE MRP RECORD

• Project inventory balances forward to determine
  when net requirments occur

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THE MRP RECORD

• Plan on receiving a batch of parts a Planned
  Order Receipt to cover any net requirements
• The lot sizing rule for this part is EOQ 50

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THE MRP RECORD

• Plan on releasing the batch of parts in advance
  so it will be completed when needed
• The planning lead time for this part is 1 period

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THE MRP RECORD

• Repeat the same logic for period 4

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THE MRP RECORD

• . . . And period 5

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THE MRP RECORD

• . . . And period 6

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LOW-LEVEL CODING

• Determines order of MRP calculations
• Each BOM level is assigned a number
• Products are at level 0
• Each part is assigned the number of the lowest
  level at which it appears in any BOM
• Calculate plans for level 0 first, then level 1,
  etc. . . .

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VERTICAL LINKAGE OF MRP RECORDS

• Objective find material plans planned order
  releases for all parts
• Data requirements
• MPS and BOMs
• Item master file -- stable part data (lead time,
  lot-sizing, etc.)
• Subordinate IMF -- transient part data (Current
  inventory and plans) 
• Gross requirements are ultimately derived from
  MPS
• But in calculations, the gross requirements for a
  part depend only on the planned order releases of
  the parent parts

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MRP EXAMPLE

• Consider the following MPS for products X and Y

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MRP EXAMPLE

• Consider the following MPS for products X and Y
• Offset MPS by lead time to get planned order
  releases

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MRP EXAMPLE

• Planned order releases for X and Y serve as basis
  for gross requirements of B

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MRP EXAMPLE

• Planned order releases for X and Y serve as basis
  for gross requirements of B

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MRP EXAMPLE

• Planned order releases for X and Y serve as basis
  for gross requirements of B

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MRP EXAMPLE

• Apply EOQ lot-sizing rule for part B

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MRP EXAMPLE

• Apply EOQ lot-sizing rule for part B

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MRP EXAMPLE

• Apply EOQ lot-sizing rule for part B

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MRP EXAMPLE

• Apply EOQ lot-sizing rule for part B

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MRP EXAMPLE

• Apply EOQ lot-sizing rule for part B

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MRP EXAMPLE

• Apply EOQ lot-sizing rule for part B

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MRP EXAMPLE

• Gross requirements for A depend upon X and B

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MRP EXAMPLE

• Gross requirements for A depend upon X and B

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MRP EXAMPLE

• Apply EOQ lot-sizing rule for part A

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THE ACTION BUCKET

• Any planned order release in the upcoming period
  requires an action
• Cancellation
• Releasing/launching
•  
• If the decision is to launch . . .
• Check availability of parts
• Allocate parts
• Issue picking tickets
• Issue workorder

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THE ROLLING PLANNING HORIZON

• MRP looks forward for a fixed number of periods
• Suppose 10 units are actually disbursed in period
  1
• New gross requirements in period 7 are 40

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THE ROLLING PLANNING HORIZON

• MRP looks forward for a fixed number of periods
• Suppose 10 units are actually disbursed in period
  1
• New gross requirements in period 7 are 40

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THE ROLLING PLANNING HORIZON

• MRP looks forward for a fixed number of periods
• Suppose 10 units are actually disbursed in period
  1
• New gross requirements in period 7 are 40
• A new planned order release is generated

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THE ROLLING PLANNING HORIZON

• During period 2 the scheduled receipt of 50 units
  is completed and received into inventory

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THE ROLLING PLANNING HORIZON

• During period 2 the scheduled receipt of 50 units
  is completed and received into inventory

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THE ROLLING PLANNING HORIZON

• The planned order release of 50 units in period 2
  the action bucket requires an action
• The planner checks that the parts are still
  needed
• The planner checks parts and capacity availability

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THE ROLLING PLANNING HORIZON

• The planned order release of 50 units in period 2
  the action bucket requires an action
• The planner checks that the parts are still
  needed
• The planner checks parts and capacity
  availability
• The order is released
• The planned order receipt becomes a scheduled
  receipt