MATERAIALS REQUIREMENT PLANNING(MRP)

VENKATESWARA RAO .KORASIGA

MASTER SCHEDULE
FOR
END ITEMS

MRP
DETAILED SCHEDULE FOR
RAW MATERIALS
& Dependent demand lumpy COMPONENTS

USED IN THE END PRODUCTS

MRP Systems
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.

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

BASIC RAW MATERIAL COMPONENTS

C1

C2

C3

Cn

PRODUCTS

P1

P2

P3

PN

MRP Systems
Master Production Schedule (MPS): Example
Product: personal stapler no. 12468 Planned order releases 1 1000 2 1000 3 1000 Week 4 0 5 0 6 1500

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.

MRP Systems
Bill of Material (BOM): A listing of all components required for each enditem. Example personal stapler no. 12468. This stapler is assembled from 3 sub-assemblies.

Standard , Personal Stapler

Base Assembly

Top Jaw

Bottom Jaw

Top Assembly

Pin

Spring Assembly

Base Plate

Base Jaw Molding Support

2 Stake Tension Rivet Plate

Top

2 Top Locator Stake Cover Plate Rivet

Pin

Copper Slide Slide Spring Pin Housing

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 Inventory Status Top Assembly 1212 Spring Assembly 1150 Locator Plate 146 Slide Pin 558

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

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

MRP Systems
Requirements explosion and order release plan: Example order release plan for personal stapler no. 12468

Week 0 Top Assembly: Lead time = 1 Gross Requirements Scheduled Receipts Level1212 One (Projected) On-hand Net Requirements Planned Order Releases 1 1000 2 1000 3 1000 4 5 6 1500

Planning Top Assembly 212

788 788 1000 1000 1500 1500

MRP Systems
Requirements explosion and order release plan: Example order release plan for personal stapler no. 12468

Week 0 1 2 1000 3 1000 4 5 6 1500 Spring Assembly: Lead time = 1 Gross Requirements 1000 Scheduled Receipts Level One Planning (Projected) On-hand 1150 150 Net Requirements Planned Order Releases 850

Spring Assembly
850 1000 1000 1500 1500

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

Week 0 1 2 3 4 5 6 Locator Plate : Lead time = 2 * TheRequirements 892 units released in week 1 will till week 3 unless some Gross 788 not arrive 1000 1500 Scheduled Receipts 750 expedited actions occur (Projected) On-hand 146 108 Net Requirements 892 1500 Level Two Planning Spring Assembly Planned Order Releases 892* 1500

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.

Week 0 Slide Pins: Lead time = 1 Gross Requirements Scheduled Receipts (Projected) On-hand Net Requirements Planned Order Releases 1 850 650 358 642 2 1000 3 4 5 1500 6

Level Two Planning Spring Assembly 642

1500

558

1500

MRP Systems
Recall the requirements explosion and order release plan from Ex. order release plan for personal stapler no. 12468

Week 0 Top Assembly: Lead time = 1 Gross Requirements Scheduled Receipts (Projected) On-hand How might you allow for Net Requirements variability? Planned Order Releases 1 1000 2 1000 3 1000 4 5 6 1500

1212 losses 212and or demand variability and lead-time quality 788 788 1000 1000 1500

1500

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:
order release net req. yield

0 Top Assembly: Lead time = 1 Gross Requirements Scheduled Receipts (Projected) On-hand Net Requirements Planned Order Releases Yeild = 90%

1 1000

2 1000

3 1000

6 1500

1212

212 876 788 1111 1000 1667 1500

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:

0 Top Assembly: Lead time = 1 Gross Requirements Scheduled Receipts (Projected) On-hand Net Requirements Planned Order Releases Safety facotr = 15%

1 1000

2 1000

3 1000

6 1500

1212

212 906 788 1150 1000 1725 1500

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.

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:

C
OP#1 WC200 .10 hr/unit Purchased WC300 workcenter 200 .15 hr/unit

C
OP#2 WC300 .15 hr/unit

Part C has a 2-week lead time, and uses both and 300. Part D WC200 F .20 hr/unit consists of part E which requires WC 300 and part F (a purchased component).
-5 -4 -3 -2 -1 0

MRP Systems
Rough-Cut Capacity Planning: An aggregated, time phased profile for end item A and another end item B is shown below.

End Item A Period Workcenter 100 200 300 0 0.05 0.2 0.15 0.1 0.15 -1 -2 0 0.05

End Item B Period -1 -2

0.2 0.3

0.2 0.15

Aggregated time-phased load profiles for end items (Hrs/Unit)

MRP Systems
Rough-Cut Capacity Planning: Given a master production schedule for the facility:

And the

End Item A time-phased B

Period 1 2 3 50 75 25 load profile, results in 75 125the

4 5 50 200 total resource 100

requirements 150

Workcenter 100 200 300

-1 20 18.75

0 32.5 41.25

Period 1 2 6.25 3.75 42.5 55 33.75 63.75

3 7.5 50 67.5

4 7.5 70 52.5

5 10 30 45

6 7.5

MRP Systems
Master Production Schedule (MPS): Example

Product: personal stapler no. 12468 Planned order releases Production of 1000

Week 4 0 weeks 5 2, 0and 6 3, 1500

no. 1, followed by no more stapler production until week 6 in which 1500 staplers will be produced.

1 2 3 1000 12468 1000 staplers 1000 is planned for

MRP Systems
Bill of Material (BOM): A listing of all components required for each enditem. Example personal stapler no. 12468. This stapler is assembled from 3 sub-assemblies.

Standard , Personal Stapler

Base Assembly

Top Jaw

Bottom Jaw

Top Assembly

Pin

Spring Assembly

Base Plate

Base Jaw Molding Support

2 Stake Tension Rivet Plate

Top

2 Top Locator Stake Cover Plate Rivet

Pin

Copper Slide Slide Spring Pin Housing

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 Inventory Status Top Assembly 1212 Spring Assembly 1150 Locator Plate 146 Slide Pin 558

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

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

MRP Systems
Requirements explosion and order release plan: Example order release plan for personal stapler no. 12468

Week 0 Top Assembly: Lead time = 1 Gross Requirements Scheduled Receipts Level1212 One (Projected) On-hand Net Requirements Planned Order Releases 1 1000 2 1000 3 1000 4 5 6 1500

Planning Top Assembly 212

788 788 1000 1000 1500 1500

MRP Systems
Requirements explosion and order release plan: Example order release plan for personal stapler no. 12468

Week 0 1 2 1000 3 1000 4 5 6 1500 Spring Assembly: Lead time = 1 Gross Requirements 1000 Scheduled Receipts Level One Planning (Projected) On-hand 1150 150 Net Requirements Planned Order Releases 850

Spring Assembly
850 1000 1000 1500 1500

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

Week 0 1 2 3 4 5 6 Locator Plate : Lead time = 2 * TheRequirements 892 units released in week 1 will till week 3 unless some Gross 788 not arrive 1000 1500 Scheduled Receipts 750 expedited actions occur (Projected) On-hand 146 108 Net Requirements 892 1500 Level Two Planning Spring Assembly Planned Order Releases 892* 1500

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.

Week 0 Slide Pins: Lead time = 1 Gross Requirements Scheduled Receipts (Projected) On-hand Net Requirements Planned Order Releases 1 850 650 358 642 2 1000 3 4 5 1500 6

Level Two Planning Spring Assembly 642

1500

558

1500

MRP Systems
Recall the requirements explosion and order release plan from Ex. order release plan for personal stapler no. 12468

Week 0 Top Assembly: Lead time = 1 Gross Requirements Scheduled Receipts (Projected) On-hand How might you allow for Net Requirements variability? Planned Order Releases 1 1000 2 1000 3 1000 4 5 6 1500

1212 losses 212and or demand variability and lead-time quality 788 788 1000 1000 1500

1500

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:
order release net req. yield

0 Top Assembly: Lead time = 1 Gross Requirements Scheduled Receipts (Projected) On-hand Net Requirements Planned Order Releases Yeild = 90%

1 1000

2 1000

3 1000

6 1500

1212

212 876 788 1111 1000 1667 1500

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:

0 Top Assembly: Lead time = 1 Gross Requirements Scheduled Receipts (Projected) On-hand Net Requirements Planned Order Releases Safety facotr = 15%

1 1000

2 1000

3 1000

6 1500

1212

212 906 788 1150 1000 1725 1500

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.

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:

C
OP#1 WC200 .10 hr/unit Purchased WC300 workcenter 200 .15 hr/unit

C
OP#2 WC300 .15 hr/unit

Part C has a 2-week lead time, and uses both and 300. Part D WC200 F .20 hr/unit consists of part E which requires WC 300 and part F (a purchased component).
-5 -4 -3 -2 -1 0

MRP Systems
Rough-Cut Capacity Planning: An aggregated, time phased profile for end item A and another end item B is shown below.

End Item A Period Workcenter 100 200 300 0 0.05 0.2 0.15 0.1 0.15 -1 -2 0 0.05

End Item B Period -1 -2

0.2 0.3

0.2 0.15

Aggregated time-phased load profiles for end items (Hrs/Unit)

MRP Systems
Rough-Cut Capacity Planning: Given a master production schedule for the facility:

And the

End Item A time-phased B

Period 1 2 3 50 75 25 load profile, results in 75 125the

4 5 50 200 total resource 100

requirements 150

Workcenter 100 200 300

-1 20 18.75

0 32.5 41.25

Period 1 2 6.25 3.75 42.5 55 33.75 63.75

3 7.5 50 67.5

4 7.5 70 52.5

5 10 30 45

6 7.5

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?

Workcenter 100 200 300

-1 20 18.75

0 32.5 41.25

Period 1 2 6.25 3.75 42.5 55 33.75 63.75

3 7.5 50 67.5

4 7.5 70 52.5

5 10 30 45

6 7.5

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:

On-Hand Inventory A B

Then net MPS becomes:

100 125

End Item A B

2 25

Period 3 25 75

4 50 100

5 200

6 150

MRP Systems
Capacity Requirements Planning: From the net MPS, the workstation loading levels by part:
Period WC100-A WC200-A WC300-A WC100-B WC200-B WC300-B 0 1.25 0 0 0 0 0 1 1.25 5 3.75 3.75 0 0 2 2.5 7.5 7.5 5 15 22.5 3 3 22.5 11.25 0 35 41.25 4 12 0 45 37.5 7.5 20 5 10 0 20 30 0 30 6 0 0 0 0 30 22.5

Therefore capacity plan is:

Period WC100 WC200 WC300 0 1.25 0 0 1 5 5 3.75 2 7.5 22.5 30 3 3 57.5 52.5 4 49.5 7.5 65 5 40 0 50 6 0 30 22.5

Are there any concerns?

MRP Systems
Master Production Schedule (MPS): Planned production quantities for enditems 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.

EVOLUTION OF MRP
Improved computational efficiency of computers

AN IMPROVED ORDERING METHOD

Unrealistic M/c schedules, ignoring plant capacities Not only plans priorities but provides feedback to executing the priority plan

PRIORITY PLANNING CLOSED LOOP MRP

MRP II
Manufacturing Resource Planning

(Links functions -Capacity planning -Inventory management -Shop floor control -MRP)

Links up the closed loop MRP system with the financial systems of the company

Customer orders

Sales forecasts

Service Parts requirements

Engg. changes

Master Production schedule

Inventory transactions

Bill of Materials file

MRP PROCESSOR

Inventory Record file

OUT PUT REPORTS Capacity vs Gross & Net requirements Load report report Shop floor Planning report Production Order Status & exceptions report

THANK YOU