1. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 1 Materials Requirements Planning Chapter 16

2. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 2 Outline Definition of MRP Systems MRP versus Order-Point Systems MRP Example MRP Elements Operating an MRP System The Successful MRP System

3. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 3 Definitions of MRP Systems “Closed-loop” MRP System (See Figure 16.1) Three principal functions of MRP (Orlicky): –Inventory –Priorities –Capacity Types of MRP: –Type I. An inventory control system –Type II. A production and inventory control system –Type III. An Enterprise Resource Planning (ERP) system

4. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 4 MRP versus Order-Point Systems (Table 16.2)

5. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 5 BOM (Table Example) Top Leg Long Rail Short Rail

6. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 6 BOM (Product Structure) Short Rails (2) Table (End Item) Long Rails (2) Legs (4) Top (1) Leg Assembly (1)

7. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 7 Indented BOM Level CodeComponent 0Table (end-item) 1Leg assembly (1) 2Short rails (2) 2Long rails (2) 2Legs (4) 1Top(1)

8. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 8 MRP Elements Bill of Materials (BOM) Master Scheduling Inventory Records Capacity Planning Purchasing Shop Floor Control

9. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 9 Operating an MRP System Should MRP carry “safety stock”? How much “safety stock” should be carried? Issue of “safety lead time” Danger of “informal” system driving out the “formal” system Expansion of MRP to other functions (finance, HRM, etc.) of business

10. Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2004 10 Elements of Success in MRP Implementation planning Adequate computer support Accurate data Management support User knowledge