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Material Requirements Planning Planned Orders Demand BOM Material Data Inputs Output

M aterial R equirements P lanning

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Demand. BOM. Material Data. M aterial R equirements P lanning. Inputs. Output. Planned Orders. Inputs. Demand. Output. Planned Orders. BOM. Material Data. M aterial R equirements P lanning. With MRP, production is planned to meet: Future demand forecasts (make-to-stock) - PowerPoint PPT Presentation

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Page 1: M aterial  R equirements  P lanning

Material Requirements Planning

Planned Orders

Demand

BOM

MaterialData

Inputs

Output

Page 2: M aterial  R equirements  P lanning

Material Requirements Planning

PlannedOrders

Demand

BOM

MaterialData

Inputs

Output

With MRP, production is planned to meet: Future demand forecasts (make-to-stock) Orders to be completed in the future (make-

to-order or assemble-to-order) A key input is, therefore, actual demand or a

demand forecast

MRP is a Push production system

Page 3: M aterial  R equirements  P lanning

Material Requirements Planning

PlannedOrders

Demand

BOM

MaterialData

Inputs

Output

Planning Sales and Operations Planning (SOP)

Forecasting, marketing plans, capacity Profitability Analysis

Controlling (CO) Module (CO-PA) Direct Input (Demand Management)

Demand Sources

Page 4: M aterial  R equirements  P lanning

Demand Management

• Simplest way to create demand it to input it directly:

Page 5: M aterial  R equirements  P lanning

Demand

Page 6: M aterial  R equirements  P lanning

Demand—S/R List

Page 7: M aterial  R equirements  P lanning

Material Requirements Planning

PlannedOrders

Demand

BOM

MaterialData

Inputs

Output

MRP uses the assembly structure, or Bill of Material (BOM) to determine how many components or subassemblies are needed to make the required number of finished products Considers available inventory of

components and subassemblies in calculations—net requirements

MRP is designed for assembled products

Page 8: M aterial  R equirements  P lanning

Material Requirements Planning

PlannedOrders

Demand

BOM

MaterialData

Inputs

Output

For end-items, demand is “independent”—from customers

For other components, demand can be determined using the BOM Dependent demand

MRP is designed for assembled products

Page 9: M aterial  R equirements  P lanning

Material Requirements Planning

PlannedOrders

Demand

BOM

MaterialData

Inputs

Output## NRG–A

(7 cases)

## Dough NRG–A(500 lb)

## Oats(300 lb)

## Wheat Germ(50 lb)

## Carob Chips(50 lb)

## Raisins(50 lb)

Page 10: M aterial  R equirements  P lanning

Material Requirements Planning

PlannedOrders

Demand

BOM

MaterialData

Inputs

Output## NRG–A

(7 cases)

## Dough NRG–A(500 lb)

## Oats(300 lb)

## Wheat Germ(50 lb)

## Carob Chips(50 lb)

## Raisins(50 lb)

Time

Key MRP concept:

Time-phased BOM

Page 11: M aterial  R equirements  P lanning

Bill of Material (BOM)

Page 12: M aterial  R equirements  P lanning

Bill of Material (BOM)

## NRG–A(7 cases)

## Dough NRG–A(500 lb)

Page 13: M aterial  R equirements  P lanning

Bill of Material (BOM)

## NRG–A(7 cases)

## Dough NRG–A(500 lb)

Page 14: M aterial  R equirements  P lanning

Bill of Material (BOM)

## Dough NRG–A(500 lb)

## Oats(300 lb)

## Wheat Germ(50 lb)

## Nutmeg(2 lb)

## Cinnamon(5 lb)

Page 15: M aterial  R equirements  P lanning

Bill of Material (BOM)

## Dough NRG–A(500 lb)

## Oats(300 lb)

## Wheat Germ(50 lb)

## Nutmeg(2 lb)

## Cinnamon(5 lb)

Page 16: M aterial  R equirements  P lanning

Material Requirements Planning

PlannedOrders

Demand

BOM

MaterialData

Inputs

Output

Primary material data includes: Current Inventory Lot sizing procedure Production lead times

All of this data is available in SAP via the Stock/Requirements List

Material Data determines production lot size and timing

Page 17: M aterial  R equirements  P lanning

Material Data—S/R List

Inventory Level0

Inventory Detail

Page 18: M aterial  R equirements  P lanning

Inventory—Detail

Page 19: M aterial  R equirements  P lanning

Material Data—S/R List

Lot SizeFX, 7

Page 20: M aterial  R equirements  P lanning

Material Data—S/R List

LeadTime1

Page 21: M aterial  R equirements  P lanning

Material Requirements Planning

Page 22: M aterial  R equirements  P lanning

Material Requirements Planning

Page 23: M aterial  R equirements  P lanning

Material Requirements Planning

Page 24: M aterial  R equirements  P lanning

Material Requirements Planning

Page 25: M aterial  R equirements  P lanning

Material Requirements Planning

Page 26: M aterial  R equirements  P lanning

Material Requirements Planning

Page 27: M aterial  R equirements  P lanning

Material Requirements Planning

Page 28: M aterial  R equirements  P lanning

MRP—Net Requirements

Page 29: M aterial  R equirements  P lanning

Part: A

LS: 50 LT: 2 1 2 3 4 5 6 7 8 9 10

Gross Requirements 10 10 15 15 15 20 20 15 10 10

Scheduled Receipts 50

Planned Order Receipts 50 50

Available Balance 15 5 45 30 15 0 30 10 45 35 25

Planned Order Releases 50 50

Textbook MRP uses a bucketed system

Textbook MRP

Page 30: M aterial  R equirements  P lanning

Textbook MRP

LS - lot size - size of production batch or lot sizing methodGross Requirements - quantity needed in each period - from MPS or from other components and assembliesScheduled Receipts - Planned receipt dates for orders that have already been placedPlanned Order Receipts - expected receipt date for planned orders (orders that haven't been placed yet)Available Balance - Projected inventory balance at the end of each periodPlanned Order Releases - Orders that need to be placed (as determined by MRP process) to meet gross requirements (source of planned order receipts)

Page 31: M aterial  R equirements  P lanning

C

B C D

A

(2)

MPS Period

Part # 1 2 3 4 5 6 7 8 9 10 A 10 10 15 10 10 5 10 10 15 15

Inventory Data

Component

LS

LT

Initial Inventory

Scheduled Receipts

A LFL 1 - 10 in pd. 1 B 50 2 30 50 in pd. 2 C 50 3 40 50 in pd. 3 D 30 4 30

30 in pd. 3

Textbook MRP—Example Problem