Submitted to: Submitted by:
Mansi Saxena Vishakh Kumar
Sachin Kumar
Vishal Kumar & Rajdeep
A-3
Contents of Presentation
Relevance of the material requirement planning.
MRP system inputs &output
Role in production
Advantage disadvantage
Material Requirements Planning
(MRP)
Manufacturing computer information
system
Determines quantity & timing of dependent
demand items 1 2 3
Gross Requirements
2 20
4
25
5
15
Scheduled Receipts 5 30
Available 25 23 33 33 8
Net Requirements 7
Planned Order Receipts 7
Planned Order Releases 7
Material requirements
planning
Materials Requirements planning : Computer based
information system for ordering and scheduling of
dependent demand inventories.
A manufacturing company to produce end items to
meet demand the availability of sufficient capacity
must be co-ordinate with the availability of all raw
material
Function of MRP
Order planning and control
Priority planning and control
Providing a basis for planning capacity
requirement
MRP depend on some factor
Cost estimate
Order entry
Inventory control
Bill of material
Purchasing
Manufacturing floor control and scheduling
invoicing
Material requirement planning
five stage
Target and marketing
Development of offering
Sales
Superior experience
Retention and win back
Functional input Functional output
Change in product
design and product MRP New design in
corporation data
structure
What MRP does
END
Master schedule for ITEM
MRP
Detail schedule for
RAW MATERIAL
&COMPONENTS
Used in the end product
Operation of MRP system
Inputs process outputs
Inventory Inventory
status file transaction data
MPS Planned order
MRP
file schedule
Exception
B.O.M. file
reports
Inventory Classifications
Inventory
Process Number & Demand
Other
stage Value Type
Raw Material WIP A Items Maintenance
Independent
Finished Goods B Items Dependent
Dependent
C Items Operating
Typical Focus of the Master
Production Schedule
Make to Order Assemble to Order Stock to Forecast
or Forecast (Product Focus)
(Process Focus) (Repetitive) Schedule finished
Number of end product
items
Typical focus of the
Schedule
master production
Schedule modules
schedule
orders
Number of
inputs
Print shop Motorcycles, autos, Steel, Beer,
Examples:
Machine shop TVs, fast-food Bread Light
Fine dining restaurant restaurant bulbs, Paper
Structure of the MRP System
Master Production
BOM
Schedule
(Bill-of-Material) MRP by period report
Lead Times
MRP by date report
(Item Master File)
MRP
Programs Planned orders report
Inventory Data
Purchase requirements
Purchasing data
Exception reports
The Planning Process
Production Plan Master Production
Schedule
Material
Requirements
Plan
Capacity
Requirements
Plan
No Realistic??
Yes
Execute Capacity
Plans
Execute Material
Plans
Purpose of MRP
Control inventory level
Assign operating priorities
Assign capacity to load production system
The theme of MRP is the “getting the right
materials to the right place at the right time in
right quantities”.
Effect on MRP
End product
Usually forecast
Conventional inventory control applicable
Raw material
Component parts
subassemblies
Objective of MRP
To improve customer service by meeting
delivery schedules promised and
shortening delivery lead times
To reduce inventory costs by reducing
inventory levels
To improve plant operating efficiency by
better use of productive resource
Three factor of MRP technique
The MRP technique as a requirements
calculator
The MRP A manufacturing ,planning and
control system
The MRP A manufacturing resource
planning system
Why requirement of MRP
How can we increase the production
How can we more utilization of the things
How can we improve the quality
How can we give the best services
For increase the profit
Independent and Dependent
Demand
Independent Demand
A Dependent Demand
B(4) C(2)
D(2) E(1) D(3) F(2)
Independent demand is uncertain.
Dependent demand is certain.
Dependent versus Independent
Demand
Item Materials With Materials With
Independent Demand Dependent Demand
Demand
Company Customers Parent Items
Source
Material
Finished Goods WIP & Raw Materials
Type
Method of
Forecast & Booked Calculated
Estimating
Customer Orders
Demand
Planning
EOQ & ROP MRP
Method
Implementation of MRP
Management commitment
User involvement
Education and training
Selection of packages
Data accuracy
Realistic MPS
MRP Requirements
Computer system
Mainly discrete products
Accurate bill-of-material
Accurate inventory status
99% inventory accuracy
Stable lead times
© 1984-1994 T/Maker Co.
Bill-of-Material
Product Structure Tree
Bicycle(1)
P/N 1000
Handle Bars (1) Frame Assembly (1)
P/N 1001 P/N 1002
Wheels (2) Frame (1)
P/N 1003 P/N 1004
Example
scissors SC
M Qty: 1
middle
R Qty: 1 L Qty: 1
Right side Left side
SC
M Qty: 2
R Qty: 1 L Qty: 1
Example
Level Chair
0
1 Leg Back
Assembly Seat Assembly
Cross Side Cross Back
2 Legs (2)
bar Rails (2) bar Supports (3)
3
MRP Input
On hand
Schedule receipt
Inventory at
Gross requirement for the + the end of = Net requirement
_ period for a period
for a period the period
Example of MRP
order qty =70 week
lead time =4 week 1 2 3 4 5 6 7 8 9 10 11 12
safety stock40
project requirement 20 20 25 20 20 25 20 20 30 25 25 25
scheduled receipts 70 70 70 70
on hand at the end
of period 65 45 95 70 50 100 75 55 105 75 50 95 70
planned order
release 70 70 70
Some Example
If Maruti suzuki decided 1000 units of alto
cars model (finished goods ) dec2009
based on forecast
Dell computer manufacture who
planned to produce 10000 units of desk top
Sony Eric son mobile company is
planning to produce 50000 units of
mobile with camera 4.0 mega pixel
capacity
Advantage of MRP
Reduced idle time
Reduced set up time
Better customer services
Better response to market demands
Helps managers to use the planned
schedule
Disadvantage of MRP
Lack of top management commitment
MRP was presented and perceived as a
complete and stand alone system to run a
firm rather than as part of the total system
MRP can be made to function with just in
time production system
Problem in using MRP
Preparation of MPS
Maintaining accurate of B.O.M. files
In correct stock (inventory ) status
Unrealistic lead times
