1. Manufacturing Systems Engineering
Presentation on
Material Requirements Planning

2. Overview What is MRP Benefits of MRP Inputs and Outputs of MRP
MRP Processing

3. Benefits of MRP Improved facility utilization
Faster response to market
Better inventory planning
Reduced setup costs
Improved customer service
Reduced inventory investment

4. MRP Inputs And Outputs Product Structure File
Master Production Schedule
Inventory Master File
Material Requirements Planning
Planned Order Releases
Rescheduling Notices
Purchase Orders
Work Orders

5. Master Production Schedule (MPS)
150
100 8 7 6 5 4 3 2 1
Week Number
Quantity

6. Product Structure Tree (BOM)
SHUTTER
WOOD SECTIONS
FRAME
(4) (2)

7. Inventory Master File (ISF)
Each inventory item can be carried as a separate file
Status according to “time buckets” for all items
On-hand quantities
Scheduled receipt of orders
Pegging
Identify each parent item that created demand

8. MRP Processing

9. The Explosion Process
Takes the quantity in the MPS, along information in the BOM, and simulates the disassembly of that quantity into requisite number of constituent parts and materials.
It is the calculation of gross requirements for the components at the next level down the product structure.

10. The Explosion Process

11. The Netting Process
Adjusts gross requirements to account for the quantity already on hand and on order.

12. Net Requirements (continued)
To be
delivered 1 2 3 4 5 6 7 8
100
150
Frames – 2 per shutter
300 60 70
Order receipt
Order placing
130
Net requirements
200
On hand inventory
Scheduled receipts
Gross Requirements

13. The Offsetting Process
Determines the timing of order releases, using given information on planned lead times and working backwards from the dates at which net requirements occur.
Planned lead times are allowance for vendor response time (in the case of purchase orders) and allowances for run time, setup time, move time and queuing (in the case of shop orders).

14. The Lot Sizing Process
Determines the batch quantities that will be purchased or produced in order to meet net requirements.
Once the lot size is set, it becomes clear which net requirements are to be covered.

15. Problems with MRP Long planned lead times System nervousness
long lead times invariably lead to large inventories
System nervousness
a small change in master production schedule results in a large change in planned order releases

16. Summary MRP holds good for Dependent and discrete items
Complex products
Job shop production
Assemble-to-order environments
MRP helps in
Increased customer service
Better inventory planning

17. Thanx!