Ch%2014_mod - Operations Management MGT 3200 Dr Samia Siha...

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Unformatted text preview: Operations Management MGT 3200 Dr. Samia Siha Material Requirements Planning (MRP) and (ERP) Chapter 14 Chapter Map MRP & ERP MRP & ERP The Planning The Planning Hierarchy Hierarchy Master Production Master Production Schedule Schedule Data Inputs Data Inputs To MRP To MRP MRP Structure MRP Structure MRP Management MRP Management ERP ERP Bill Of Material Bill Of Material BOM BOM Gross Requirement Gross Requirement MRP Dynamics MRP Dynamics Lead Times Lead Times Net Requirement Net Requirement Finite Capacity Finite Capacity Scheduling Scheduling Inventory Data Inventory Data MRP Sheet MRP Sheet Small Bucket Small Bucket Approach Approach Purchasing Data Purchasing Data Lot Sizing Lot Sizing Techniques Techniques Balanced Flow Balanced Flow Approach Approach Mater Production Mater Production Schedule Schedule © Copyrighted Supermarket Supermarket 2 Learning Objectives 1. Distinguish between dependent and independent demand 2. Define the objective of materials requirements planning (MRP) 3. Define the master production schedule (MPS), bill of materials Define (BOM), and exploding the BOM (BOM), 4. Calculate an MRP plan 5. Describe examples of how MRP applies to services 6. Define enterprise resource planning (ERP) 7. Recognize and describe advantages and disadvantages of ERP Recognize systems systems © Copyrighted 3 Independent vs. Dependent Demand Independent Demand (Demand not related to other items or the final end-product) E(1 ) © Copyrighted Dependent Demand (Derived demand items for component parts, subassemblies, raw materials, etc.) Independent Demand Comes from customers; it must be forecasted Finished goods & service parts Sold in small quantities Relatively stable Fixed order point or periodic (Chapter 12) © Copyrighted Dependent Demand The demand for one item is related The to the demand for another item to Given a quantity for the end item, Given the demand for all parts and components can be calculated components In general, used whenever a In schedule can be established for an item item MRP is the common technique © Copyrighted 6 Material Requirements Planning MRP MRP is the logic for determining the number of parts, components, and materials needed to produce a product. MRP provides time scheduling information specifying when each of the materials, parts, and components should be ordered or produced. Dependent demand drives MRP. MRP is a software system. © Copyrighted Material Requirements Planning System Based on a master production schedule, a material requirements planning system: Creates schedules identifying the specific parts and materials required to produce end items. Determines Determines exact unit numbers needed. the dates when orders for those materials should be released, based on lead times. © Copyrighted MRP Requirements Effective use of dependent demand Effective inventory models (MRP) requires the following following 1. 2. 3. 4. 5. © Copyrighted Master production schedule Specifications or bill of material Inventory availability Purchase orders outstanding Lead times 9 Master Production Schedule (MPS) Specifies what is to be made and when Must be in accordance with the aggregate Must production plan production Aggregate production plan sets the Aggregate overall level of output in broad terms overall As the process moves from planning to As execution, each step must be tested for feasibility feasibility The MPS is the result of the production The planning process planning © Copyrighted 10 Master Production Schedule (MPS) MPS is established in terms of specific MPS products products Schedule must be followed for a Schedule reasonable length of time reasonable The MPS is quite often fixed or frozen in The the near term part of the plan the The MPS is a rolling schedule The MPS is a statement of what is to be The produced, not a forecast of demand produced, © Copyrighted 11 Aggregate Production Plan Months January 1,500 Aggregate Production Plan (shows the total quantity of amplifiers) Weeks 1 February 1,200 2 3 4 5 6 7 8 Master Production Schedule (shows the specific type and quantity of amplifier to be produced 240 watt amplifier 150 watt amplifier 75 watt amplifier © Copyrighted 100 100 500 100 500 300 100 450 450 100 Figure 14.2 12 The Planning Process Production Capacity Inventory Marketing Customer demand Procurement Supplier performance Management Return on investment Capital Human resources Manpower planning Aggregate production plan Master production schedule © Copyrighted Finance Cash flow Engineering Design completion Change production plan? 13 Figure 14.1 The Planning Process Master production schedule Change requirements? Change master production schedule? Material requirements plan Change capacity? Capacity requirements plan No Realistic? Yes Is capacity plan being met? Is execution meeting the plan? Execute capacity plans Execute material plans © Copyrighted 14 Figure 14.1 Bills of Material List of components, ingredients, List and materials needed to make product Provides product structure Items above given level are called Items parents parents Items below given level are called Items children children © Copyrighted 15 Bill of Materials Bill Back slats Leg supports Back legs Front legs Seat cushion Seat­frame boards A Ladder­back chair Bill of Materials Bill A Ladder­back chair B (1) Ladder­back subassembly F (2) Back legs G (4) Back slats Back legs Back slats C (1) Seat subassembly D (2) Front legs Leg supports Front legs H (1) Seat frame J (4) Seat­frame boards I (1) Seat cushion Seat cushion E (4) Leg supports Seat­frame boards A Ladder­back chair ...
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