MRP ccm.pdf

8/14/2019 MRP ccm.pdf

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rel. 3 2008/01/24Solving Efeso 1999

Material Requirements Planning


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- 2 -MRP Solving Efeso 1999

Material flow management is based on apredefined schedule which takes into

account demand and manufacturing leadtime

Componentmanufacturing

Componentwarehouse

Kit assembly

FP assembly

Kit warehouse

Finished product warehouse

T i m e

a n d

q u a n t i t

y

Order forecast

Orders

Material

Flows:

Material Requirements Planning - 'Push' systems (M.R.P.)


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It is based on the net requirements calculated by exploding, atcomponent level, certain predetermined finished product productionplans.

It requires each dependent-demand component or material (child) tobe ordered or manufactured based on the corresponding independent-demand component/set (parent) requirement.


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What it is

An MRP system is a decision-makingsupport tool which - by processing datareported in the Master ProductionSchedule - provides a complete pictureof:

What (which sets/subsets/parts/rawmaterials are needed to makefinished products)

How much

When to purchase/manufacture

Working principles

It explodes the production orderplan stemming from the MPS and itsuggests a time schedule for all bill-of-material levels (semi-finishedproducts, components, externalmaterials)

It synchronises activities andlogistic flows inside and outside ofthe production unit

It keeps semi-finished productstock levels at a minimum (WIP)

It inputs Capacity RequirementsPlanning


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Assemble to stockIndustry Type

MRP: Industry Application and Expected Benefits

Examples Expected BenefitsCombines multiple parts into a finishedproduct, which is then stocked in inventory to satisfycustomer demand. Examples: watches, tools, appliances.

High

Make to stock

Assemble to order

Make to order

Process

Low

High

High

Medium

Items are manufactured by machine rather thanassembled from parts. These are standard stock itemscarried in anticipation of customer demand. Examples:piston rings, electrical switches.

A final assembly is made from standard options thatthe customer chooses. Examples: trucks, generators,engines.

Items fabricated or assembled completely to customerspecification. Examples: turbine generators, heavy

machine tools.

Industries such as foundries, rubber and plastics,speciality paper, chemicals, paint, drug, foodprocessor.


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Master Production ScheduleIt indicates how much and when to produce:

finished products spare parts direct-sale materials and parts

Product structure (Bill of materials)Multi-levelFor each level of the bill of materials it defines:

links utilisation coefficient offset adjustment

Inventory level in warehouses and departmentsPhysical stock

Safety inventory

Running orders (released to production or to asupplier)

Booked quantityReorder policy

Batch size

Manufacturing time schedule

External material and componentpurchase order schedule

Customer order processability

Abnormality and problemreporting:

expediting expired orders

anticipating a previouslyreleased order

cancelling an order that hasalready been sent to thesupplier

M.R.P.

Material Requirements Planning (M.R.P.)

Output

informationInput data


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The system generates so-called

'Order proposals (planned orders)'- (status = P) -

These are subsequently analysed by theprogrammer and turned into

'Confirmed orders'- (status = F) -

which can no longer be automaticallymodified by the system, but only directly by

the programmer.

Material Requirements Planning - M.R.P. order types


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Design andtechnicalchanges

MaterialRequirements

Planning

Orderportfolio

ForecastsProduction

capacityplanning Material

movements

MasterProductionSchedule

Bill of materialsCyclesLead times...

Stock

BookedOrders...

Productstructure

Inventorylevel

Order processability andcritical points

Staff MeansSuppliers

Sales

New ordersExpeditingDelays...

Supply Production

Order loadingPrioritiesExpeditingLoads...

Material Requirements Planning Structure


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Bill ofmaterials

Production schedule(order plan)

Lead time

Batchproduction

Stock

Usagescraps

Manuf.explosion

Launchdates

OrdersNet

requirements

Grossrequirements

Production scraps

Master Production Schedule

A

B C

D E B D

D E

Starting from the independent-demand item production plan(bottom-level codes), MRP calculates gross and net quantity

and schedule requirements for all necessarymaterials/components by exploding each level of the bill ofmaterials

Material Requirements Planning: logical procedure


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- 1 0 -MRP Solving Efeso 1999

The route for the MRP procedure

1. Collect the current stocks, runningorders, booked stocks

2. Evaluate how much to order internallyand externally1. Evaluate the stock during the previous

period2. Collect the planned replenishments and

gross requirements3. Calculate the stock for actual period

1. Define the order quantity andthe offset factor

2. Plan the reorder quantity

1. Anticipate the date order2. Explode the gross requirement of highlevel components

1. Collect the availability of bill of materialsand all management information (leadtime - order policy-provenance)

2. Explode the products bill of materialsand schedule it based on lead time

1. Choice the optimal batch production(Fixed EOQ, L4L, Dynamic EOQ)

Assign the order issues Assign the order issues66

Net requirementNet requirement44

Gross requirementGross requirement11

Plan replenishmentsPlan replenishments22

Evaluate the stockEvaluate the stock33

Set the batch productionSet the batch production55


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Material Requirements Planning - Requirement explosion

X

C

Z Y

Item "A"Stock:Safety inventory:% production scrap:Supply time.:Reorder policyE.O.Q.:

10%

170 pcs50 pcs

3 periodsFixed E.O.Q.150 pcs

Link Coeff. Offset factor (at assembly)

A - BA - C

21

+ 10%-----

A

B

---150--150-150-Order plan to be issued

773333778840----Net re quirements

150--150-150----Lot-sized re quirements

---150--150-150-Gross requirements of C from A

---330--330-330-Gross requirements of B from A

-------48--Orders in progress

7733337788552211--Scrap adjusted re quirements

7030307080502010--Availability adjusted requirements

00000002060120Initial availability

70303070805020304060Gross Total Requirements

20202020301010101010Gross External Requirements

50101050504010203050Gross Internal Requirements

10987654321Item "A"Periods


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Material Requirements Planning procedure

All the procedure's steps aretotally electronic.

A data processing of 100.000codes lasts about 10 minutes

Dont assume that the firstdata processing is

necessarily correct! Its veryimportant to run several

simulations to satisfyyourself as well as the

Master Production Schedule

Exercises


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Requirement on top of available stock for period 1, given an orderedquantity (for orders which have been already released) higher than zero(orders to be processed now)

Requirement on top of available stock for periods prior to the processingdate, given an ordered quantity (for orders which have already beenreleased) higher than zero (orders which should have been processedin the past)

Net current requirement for future period: PROCESSING DATE+LEAD TIME (orders to be issued now)

Net current requirement for periods prior to PROCESSING DATE +LEAD TIME (orders which should have been issued in the past)

No requirement on top of available stock up to PROCESSING DATE +n PERIODS, given an ordered quantity higher than zero (over-ordering)

CHECK

REORDER

EXPEDITING

ALARM

DELAY

Material Requirements Planning - Reporting (a few examples)


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?

INPUT OUTPUT

Material Requirements PlanningBasic problem posed by MRP

Too complex (requires too much information)

It requires a lot of 'discipline'

It is not problem solving oriented

It is difficult to understand correlations


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Then (and only then) our M.R.P. is going to work perfectly.What should be done?

Conditions for obtaining the minimum theoretical inventorywith MRP

If...1. Forecasts are good...

2. and well 'mixed' with orders

3. The Bill of materials is updated

4. All production cycles are updated andcorrect

5. Lead times do not change even in caseof absenteeism

6. Lead times are never forced out of thesystem (the boss does not say 'I'll seeto it')

7. Orders leave on time

8. and we are sure they were received

9. and meanwhile the lead time has notchanged

10. and meanwhile the BOM has notchanged.

11. Warehouse data is reliable

12. Data on W.I.P. is reliable

13. Nobody 'steals' materials14. 100% quality scraps are recorded

15. There is plenty of stock

16. Murphy is not holding it against us

17. .... (miscellaneous) ....


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Overall discipline!

MRP only when needed!

Streamline!

Reduce BOM levels.

Reduce number of

warehouses/buffersReduce Lead times

Reduce number of suppliers

JIT production islands

Avoid bottlenecks and manage 'onsite'

The information system may be oneof the bottlenecks!

C

A

B

B

C

Product A

A

B

C

A

B

C

the factory should not be a maze

but rather a highway

in otherwords...

Material Requirements Planning - What should be done?

MRP ccm.pdf

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