Authors: Chapman, Arnold, Gatewood, Clive
Edition: 8th Edition
Copyright: 2017 by Pearson Education, Inc.
Focus: Material Requirements Planning (MRP)
Independent Demand: Demand for products that is not driven by the demand for other goods.
Originates from outside sources.
Predominantly forecasted.
Dependent Demand: Demand that is related to production levels of other items.
Calculated based on the Master Production Schedule (MPS).
Determine Requirements:
What to order.
How much to order.
When to order.
Delivery scheduling.
Maintain Current Priorities.
MRP is integrated into the broader Manufacturing Planning and Control (MPC) framework.
Master Production Schedule (MPS): Quantities and timing for production.
Inventory Records: Detailed records including planning factors such as lead times, order quantities, and safety stock.
Bills of Material (BOM): Detailed definition of materials required for production.
Gross to Net Calculation:
Determine total requirements without accounting for inventory.
BOM Explosion:
Break down the components of assemblies to determine total needs.
Lead Time Offset:
Adjustments made to account for lead times in ordering processes.
Keeping Priorities Current:
Update plans based on changing demands.
Assigning the lowest level in the BOM where a part resides.
Scheduled Receipts: Open orders expected to be delivered at a specific time.
Planned Orders: Orders derived from the MRP that are scheduled but not yet released for processing.
Firm Planned Orders: Orders that are set in quantity and schedule to stabilize fluctuations in demand.
Release: Initiate an order to start the procurement or production process.
Pull in: Adjust order quantities to meet increased demand.
Push out: Adjust orders further into the schedule due to decreased demand.
Cancel: Stop previously scheduled orders.
Adjustments made to correct systems based on changes at the lowest levels of the product structure.
Purpose:
Defines components needed to create a finished product.
Each part has a unique identifier (part number).
Changes in the BOM necessitate new part numbers.
Indented BOM: Visual representation showing parent-component relationships.
Planning BOMs: Grouping components for forecasting and simplifying planning processes.
Multilevel BOM: Breaks down products into required components at various levels.
Lead Time: Duration required for a specific process.
Exploding: Multiplying requirements based on usage to fulfill the needs outlined in the BOM.
Offsetting: Adjusting requirements to the correct period based on lead times.
Planned Order Release: Amount to order released in line with the MRP recommendations.
Projected Available Inventory: Expected stock at the end of a period, taking into account orders placed.
Launch Orders: Initiating production and purchasing processes.
Reschedule Orders based on demand changes.
Reconcile Errors and identify solutions to material shortages.
Coordinate with other functions to resolve discrepancies in the supply chain.
Scenario: Lead time of 2 weeks and an order quantity of 200. Actions needed are determined based on MRP calculations to ensure smooth operation.
Exception Messages: Alerts generated when planners need to intervene due to MRP system outputs.
Bottom-up Replanning: Adjustments made at lower product levels to manage changes effectively.
MRP is integral to effective materials management, necessitating a thorough understanding of demand types, scheduling, order types, and BOM structures.