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By:-
Gaurav Goyal
Assistant Prof,LMTSOM
MRP-II
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MRP Works Best When...
End Products are Standardized
Batch Production
End product is moderately complex and isassembled from a set of components andraw materials
E.g automobiles, food processing and
electronics items
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Limitations of MRP
only looks at materials, ignores capacity,shop floor conditions
requires user discipline
requires accurate information/datarequires valid MPS
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WHAT IS MRP II??An information system that integrates all
manufacturing and related applications includingdecision support, material requirement planning(MRP), accounting and distribution. Def given by APICS (Advancing Productivity,Innovation and Competitive Success)
It is used to determine all resources of themanufacturing company related to manufacturing andnot only material requirement.
Has a simulation capability to answer "what-if"questions.
It is a total company management concept for usinghuman resources more productively.
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Expanded MRP with emphasis placedon integration
Financial planning
Marketing
Engineering
Purchasing
Manufacturing
MRP II
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DIFFERENCE BETWEEN MRP,MRP II AND ERPMRP is simply about ensuring the materials are
available to manufacture a specific part in aspecific volume
MRP II takes care of all other aspects of a job
including ordering, tracking inventory andensuring capacity.
ERP is an integrated information system thatserves all the departments within an enterprise.
ERP provides an integral coordination of theactivities that are carried out in all thedepartments of the enterprise.
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just because MRP says
produce X, are we able toproduce X?
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Capacity Requirements
PlanningNo..Need to evaluate the capacity to see if it can meet
planNeed all of MRP information plus:
1. How much capacity a process requires to make 1unit of a product
2. When does the process need the hours (time) ofcapacity
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CAPACITY REQUIREMENTPLANNING
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MarketMarket
DemandDemand
ProductionProductionplanplan
Problems?Problems?
Rough-cutRough-cut
capacity planningcapacity planning
YesYes NoNo YesYesNoNo
FinanceFinance
MarketingMarketing
ManufacturingManufacturing
AdjustAdjustproduction planproduction plan
MasterMaster
productionproduction
scheduleschedule
MRPMRP
CapacityCapacity
planningplanning
Problems?Problems?RequirementsRequirements
schedulesschedules
Adju
stmast e
rsc
hedule
Adju
stmast e
rsc
hedule
MRP IIFigure 13.14
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Capacity Planning
Develop a tentativemaster production
schedule
Develop a tentativemaster production
schedule
Use MRP tosimulate material
requirements
Use MRP tosimulate material
requirements
Convert material
requirements toresource requirements
Firm up a portionof the MPS
Is shopcapacity
adequate?
Cancapacity be
changed to meet
requirements
Revise tentative
master productionschedule
Changecapacity
Yes
No
Yes
No
Figure 13.15
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Defining CapacityCapacity is the amount of work that can
be done in a period of time
It is usually stated in standard hours ofwork
It must be determined at plant,department, and work center levels.
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Capacity Planning ProcessDetermine the capacity available
Translate the released and planned
orders into capacity requiredSum up capacities required for each
work center
Resolve differences between availablecapacity and required capacity
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Determining Capacity
AvailableCapacity available is the capability of a
system or resource to produce a
quantity of output in a particular timeperiod.
Available (theoretical) capacity can becalculated or measured
To calculate available capacity, oneneeds to knowAvailable timeUtilizationEfficiency
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Capacity MeasurementsTheoretical capacityvolume of activity that could be attained
under ideal operating conditions, with
minimum allowance for inefficiency. It isthe largest volume of output possible;also called maximum capacity.
Demonstrated capacityhighest activity level at which the
factory can operate with an acceptabledegree of efficiency, taking intoconsideration unavoidable losses ofproductive time (i.e., vacations, holidays,repairs to equipment) 12/01/1015
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End of Session 10
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Utilization and Efficiency
Actual Hours Charged
Utilization =Scheduled Available Hours
Standard Hours Earned
Efficiency = Actual Hours Charged
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Rated Capacity = Available time x Utilization xEfficiency
Rated or Actual Capacity
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CAPACITY REQUIREMENTPLANNINGThe technique that allows business to plan ahead to
determine how large their future inventory capacityneeds to be in order to meet demand.
Key elements of the CRP process areEstablishing
Measuring
adjusting the levels of the production capacity basedon the process of determining the amount of labor
and machine resources required to accomplish thetasks of production
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CAPACITYCapacity Lead Strategy
It is done in anticipation of demand and thecapacity is increased.
It is a very aggressive strategy and is used tolure customers away from competitors.
Capacity Lag StrategyIt is done after demand has increased and the
capacity is then increased.
It is a conservative strategy and may result inloss of customers.
It assumes that customers will return aftercapacity has been met which might not be true.
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STRATEGIES FOR TIMINGCAPACITYAverage Capacity StrategyHere average expected demand is calculated
and then capacity is increased accordingly.
It is a moderate strategy.
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Capacity Planning
Load reports:Department or workcenter reports that compare knownand expected future capacityrequirements with projectedcapacity availability.
Time fences: Series of time intervalsduring which order changes are
allowed or restricted.
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Rough Cut Capacity Planning
Approximate calculation of the capacityrequired at critical work centers to meet thedemand in order to check the feasibility of aMaster Production Schedule.
When the capacity required exceeds thecapacity available the MPS must be adjustedbefore proceeding to the MRP.
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Lead-Time ElementsQueuetime waiting before operation begins
Setup
time getting ready for operation
Run time performing operation
Wait time waiting after operation ends
Move
time physically moving between operations
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Adjustments to Capacity orLoad Increasing CapacityAdd extra shifts
Schedule overtime or weekends
Add equipment and/or personnel
Reducing Load
Subcontract work to outside suppliers Reduce lot sizes
Hold work in production control
Reduce the MPS
Reducing Capacity
Eliminate shifts or reduce length of shifts worked Reassign personnel temporarily
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Continued Increasing Load Make items normally purchased or subcontracted
Release orders early
Increase lot sizes
Increase the MPS
Redistributing the Load Use alternate work centers
Use alternate routings
Adjust operation start dates forward or backward in time
Revise the MPS
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Load Sources
Open OrdersMRP - Planned Order Releases
Other SourcesReworkExcess scrapQuality problems
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Routing Data
Operation identification codeOperation description
Planned work center
Standard setup timeStandard run time per unit
Tooling requirements
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CRP ILLUSTRATION
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MGT 651 - IV DR. OZATALAY31
Scheduling
ObjectivesMeet delivery datesEffectively use manufacturing resources
InvolvesEstablishing start and finish dates for each
operation needed to complete an order
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Scheduling and LoadingTechniquesForward scheduling:Activity starts as soon as the order is received
.regardless of due date
Backward scheduling
Activities are scheduled back from the due dateInfinite loadingAssumes capacity is infinite at any work center
Finite loading
Assumes there is a definite limit to capacity at anywork center
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MGT 651 - IV DR. OZATALAY33
Bottlenecks ManagementBottlenecks control the throughput of all
products processed by them
Work centers feeding bottlenecks should bescheduled at the rate the bottlenecks can
processA time buffer inventory should be established
before the bottleneck
Work centers fed by the bottleneck have their
throughput controlled by the bottleneck
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Input, Output, Queue, and Capacity
Queue
Capacity
Input Input Input
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Actual Output Less Than Planned Output
Queue
Capacity
Input Input Input
Not enough input?
Queues and lead
times increase
Insufficient Capacity?
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Actual Input Less Than Planned Output
Queue
Capacity
Input Input Input
Feeding work centers
behind schedule
Work released late
Late ordersMay run out of work
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Actual Output Greater Than Planned Output
Queue
Capacity
Input Input Input
May run out of work
Excess Capacity
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Actual Input Greater Than Planned Input
Queue
Capacity
Input Input Input
Feeding work centers
ahead of schedule
Work released early
Queues and lead times
will increase
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