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Material Requirements Planning and Enterprise Resource Plan Material Requirements Planning and Enterprise Resource Plan

Material Requirements Planning and Enterprise Resource Plan - PowerPoint Presentation

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Material Requirements Planning and Enterprise Resource Plan - PPT Presentation

Dr Ron Lembke Historical Perspective mrp material requirements planning MRP II Manufacturing Resource Planning ERP Enterprise Resource Planning MRP Crusade 1975 Material Requirements Planning ID: 503532

handle top assembly order top handle order assembly bracket lot planning nail requirements assy mrp 13122 policy erp steel

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Slide1

Material Requirements Planning and Enterprise Resource Planning

Dr. Ron LembkeSlide2

Historical Perspective

mrp – material

requirements

planning

MRP II – Manufacturing

Resource Planning

ERP- Enterprise Resource PlanningSlide3

MRP Crusade (1975)

Material Requirements Planning

Make sure you have enough parts when you need them

Take future demands, factor in lead times (time phase), compare to on hand, orderDetermine order size and timingControl and plan purchasing vs. OSWO inventory managementSlide4

Closed-Loop MRP

Capacity Consideration:

Part routings

Calculate loads on each work stationSee if scheduled load exceeds capacityLead-time long enough to allow some shuffling to make plan feasibleSlide5

MRP II -- Manufacturing Resource Planning

“A method for the effective planning of all resources of a manufacturing company”

(APICS def.)

Financial accounting incorporatedSalesOperations PlanningSimulate capacity requirements of different possible Master Production Schedules

1989, $1.2B MRPII sales in U.S., one third of total software salesSlide6

Success?

MRP Crusade

BeginsSlide7

ERP differences

Material planning

Capacity planning

Product designInformation warehousingAll functions in the entire company operate off of one common set of data

Instantaneous updating, visibility

Slide8

ERP Sales

Y2K: Worldwide sales of top 10 vendors

1995 $2.8 B

1996 $4.2 B1997 $5.8 B $3.2 B SAPFortune survey: 44% reported spending at least 4 times as much on implementation as on softwareSlide9

ERP Challenges

Modules assume “best practices:”

Change software to reflect company ($)

Change company to follow software (?)Accuracy of dataDrives entire systemOwnership of / responsibility for

Ability to follow structureSlide10

ERP Novel?

“Goal-like” novel

Hero learns more about ERP, deciding if it is right for his company

Company rushes through installationGeneral introduction to ERP systems, what they do, how different from MRP

SAP R/3 screen shotsSlide11

The Heart of the Matter - mrp

System for organizing WIP releases

Work in Process – work that has been started, but not yet finished

Consider Lead Time (LT)for each itemLook at BOM to see what parts neededBill of Materials – what goes into what

Release so they will arrive just as neededSlide12

Bike Production

Due

Mar

1

7

14

21

28

4

Apr

11

18

Assemble

Parts

Arrive

Frame

Wheels

Drivetrain

Seat, Bars

OCLV CarbonSlide13

Snow Shovels

Example – Snow Shovel

Order quantity is 50 units

LT is one weekSimple Bill of Materials - BOMSlide14

MRP Table

6 units shortSlide15

MRP Table

Order 50 units week earlierSlide16

Ending Inventory

Ending inventorySlide17

Terminology

Projected Available balance

Not on-hand (that may be greater)

Tells how many will be available Available to Promise – the units aren’t spoken for yet, we can assign them to a customerPlanned order releases

≠ scheduled receiptsOnly when material has been committed to their productionMove to scheduled receipts as late as possible

Preserves flexibilitySlide18

1605 Snow Shovel

1605

Snow Shovel

048

Scoop-shaft

connector

13122

Top Handle

Assy

314 scoop assembly

118 Shaft (wood)

062 Nail (4)

14127

Rivet (4)Slide19

314 scoop assembly

314 scoop assembly

14127 Rivet (6)

019 Blade (steel)

2142 Scoop (aluminum) Slide20

13122 Top Handle Assembly

1118

Top handle

Coupling (steel)

11495 Welded

Top handle bracket

Assembly

13122 Top Handle Assembly

457 Top handle

(wood)

129 Top Handle

Bracket (steel)

082 Nail (2)Slide21

BOM Explosion

Process of translating net requirements into components part requirements

Take into account existing inventories

Consider also scheduled receiptsSlide22

BOM Explosion Example

Need to make 100 shovels

We are responsible for handle assemblies.Slide23

13122 Top Handle Assembly

1118

Top handle

Coupling (steel)

11495 Welded

Top handle bracket

Assembly

13122 Top Handle Assembly

457 Top handle

(wood)

129 Top Handle

Bracket (steel)

082 Nail (2)Slide24

Net Requirements

Sch Gross Net

Part Description Inv Rec Req Req

Top handle assy 25 -- 100 75

Top handle 22 25

Nail (2 required) 4 50

Bracket Assy 27 -- Top bracket 15 --

Top coupling 39 15Slide25

Net Requirements

Sch Gross Net

Part Description Inv Rec Req Req

Top handle assy 25 -- 100 75

Top handle 22 25 75 28

Nail (2 required) 4 50 150 96

Bracket Assy 27 -- 75 48 Top bracket 15 --

Top coupling 39 15Slide26

13122 Top Handle Assembly

1118

Top handle

Coupling (steel)

11495 Welded

Top handle bracket

Assembly

13122 Top Handle Assembly

457 Top handle

(wood)

129 Top Handle

Bracket (steel)

082 Nail (2)Slide27

Net Requirements

Sch Gross Net

Part Description Inv Rec Req Req

Top handle assy 25 -- 100 75

Top handle 22 25 75 28

Nail (2 required) 4 50 150 96

Bracket Assy 27 -- 75 48 Top bracket 15 -- 48 33

Top coupling 39 15 48 --Slide28

Timing of Production

This tells us how many of each we need

Doesn’t tell when to start

Start as soon as possible?Dependent events (oh no, not that!)Slide29

13122 Top Handle Assy

Order policy: Lot-for-lotSlide30

13122 Top Handle Assy-2

Order policy: Lot-for-lotSlide31

457 Top Handle

One handle for

Each assemblySlide32

457 Top Handle

Order policy: Lot-for-lotSlide33

457 Top Handle

Order policy: Lot-for-lotSlide34

082 Nail (2 required)

Two

nails for

Each assemblySlide35

082 Nail (2 required)Slide36

082 Nail (2 required)Slide37

11495 Bracket Assembly

One

bracket for

Each assemblySlide38

11495 Bracket Assembly

Order policy: Lot-for-lotSlide39

129 Top BracketSlide40

129 Top handle bracket

Order policy: Lot-for-lotSlide41

1118 Top handle couplingSlide42

1118 Top handle coupling

Order policy: Lot-for-lotSlide43

1118 Top handle couplingSlide44

Other considerations

Safety stock if uncertainty in demand or supply quantity

Don’t let available go down to 0

Safety LT if uncertainty in arrival time

Place order earlier than necessaryOrder quantities

EOQ – Economic Order Quantity, Fixed SizeIf that’s not enough, order what you need, OR order two or more of the Fixed SizeLot-For-Lot, Periodic Order quantity, othersSlide45

Summary

Demand for final products

Compute needs for it and

Dependent Demand for componentsLook at all parts of the Bill of MaterialsComplete the Table for each

Bottom row (Pl Order Releases) becomes top row (Gross Requirements) of input components (also called children)Multiplied by # needed for each parent