1. OUTLINE
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2. History of ERP
Index Cards (Independent demand)
Computer Bills of Material (Dependent demand)
Materials Requirements Planning (Bill of Materials explosion)
Manufacturing Requirements Planning (Capacity check, infinite capacity and fixed lead time)
Enterprise Requirements Planning (All departments)
APS (Advanced Planning Systems) (Finite scheduling)

3. MRP Record, ATP

4. Capacity
Capacity planning is the process of reconciling the difference between the capacity available for the process and the capacity required to properly manage a load to satisfy the timing of the output for the specific customer whose orders represent the load
“The fundamentals of production planning and control”, Stephen N. Chapman, Pearson Prentice Hall, 2006, ISBN X

5. Capacity – Rough cut
These methods that are the easiest to calculate and take the least amount of data are also the methods that are the "roughest" - meaning the least specific and detailed. Overall Factors. This method is the "roughest" of the rough-cut methods. Take the number of the items being produced on the master schedule and multiply them by the standard hours used to produce the item. The capacity required per work center is then calculated by taking a historical percentage of each work center’s usage.

6. Capacity – Rough cut – overall factor
Overall Factors (also see Excel spreadsheet)

7. Capacity – Another method
Calculate hours required per work center per product in the period in which the product is to be delivered. Add all products
Product A
WC hours
WC hours
WC hours
Units required 100
WC 1 25 hours
WC 2 10 hours
WC 3 30 hours

8. Capacity Requirements Planning (CRP) – most detailed
The routing file. Containing information about the route the work is to take through the facility work centers, including the operations that are to be performed.
The work center file. Generally contains information on the various ele­ments of lead time associated with the type of equipment in the center. These time elements can include:
Move time - the time it usually takes to move material from one work center to another.
Wait time - the time material has to wait to be moved after it has had an operation completed.
Queue time - the time material has to wait in front of an operation before it can be processed by that operation. In many operations queue time tends to be the largest element of total lead time.

9. Capacity Requirements Planning (CRP) – most detailed
Production lead time is generally defined to be the total of move time, wait time, queue time, setup time, and run time for the given lot size of the ma­terial produced.
The "downside" of using detailed CRP is that while most of the rough-cut methods can be set up on a spreadsheet using only standard information with the master schedule, CRP requires MRP to be run. In fact, most modern sys­tems include a detailed CRP module that is linked directly into the MRP run. CRP tends to be too complex and requires too much data from other files to be run on a "stand-alone" spreadsheet application.

10. Example
Bill of Material
X – 1 A and 1 B
Y – 1 A and 2 C

11. Example

12. Example

13. Example

14. Example
we will assume, for convenience sake, that each operation in the routing takes 1 week to accomplish. That implies that for the products due at the end of week 5 (and therefore assembled during week 5), the components to assemble those products must have been built in week 4.

15. Capacity