MRP, MRP II & ERP

The TOYOTA Way

MATERIAL RESOURCE PLANNING (MRP I)

Material Requirements Planning (MRP)is a  software based production planningand inventory control system used to manage manufacturing processes.

Although it is not common now-a-days, it is possible to conduct MRP by hand as well.

An MRP system is intended to simultaneously meet three objectives:

Ensure materials and products are available for production and delivery to customers.

Maintain the lowest possible level of inventory.

Plan manufacturing activities, delivery schedules and purchasing activities.

WHEN TO USE

MRP I systems are usually employed when 1 or more of following conditions exist:

When usage (demand) of materials is discontinuous or highly unstable during a firm’s normal operating cycle (intermittent manufacturing or job shop operation as opposed to a continuous-processing or mass-production operation)

MRP Inputs MRP Processing MRP Outputs

Masterschedule

Bill ofmaterials

Inventoryrecords

MRP computerprograms

Changes

Order releases

Planned-orderschedules

Exception reports

Planning reports

Performance-controlreports

Inventorytransaction

Primaryreports

Secondaryreports

MRP PROCESSING

Gross requirements: (Forecasted)Demand period by period

Net requirements(t)

=Gross requirements(t)-Projected inventory(t-1)

-Scheduled receipt(t) If Net requirement(t) > 0

set Planned order receipts(t)>=Net requirement(t) Planned-order receipts is the production planned Projected inventory(t)

=Projected inventory(t-1)+Scheduled receipt(t)+Planned order receipts(t)-Gross requirements(t)

Planned order release(t-LT)=Planned-order receipts(t)

MRP AT PLANT LEVEL

The system adds together stocks from all of the individual storage locations, with the exception of individual customer stock, to determine total plant stock.

Individual storage locations can be planned separately or be excluded from planning.

MRP AT AREA LEVEL

Only the stocks from the storage locations or subcontractor assigned to the respective MRP area are taken into account.

This enables you to plan material requirements specifically for certain areas.

Develop a tentativemaster productionschedule

Use MRP tosimulate materialrequirements

Convert materialrequirements toresource requirements

Firm up a portionof the MPS

Is shopcapacityadequate?

Cancapacity bechanged to meetrequirements

Revise tentativemaster productionschedule

Changecapacity

Yes

No

Yes

No

MRP PLANNING

MRP OUTPUTS

Planned orders - schedule indicating the amount and timing of future orders.

Order releases - Authorization for the execution of planned orders.

Changes - revisions of due dates or order quantities, or cancellations of orders.

Performance-control reports Planning reports Exception reports

THE BENEFITS OF MRP

Inventory reduction, Reduction in production & delivery time Increased efficiency. Faster response to market changes Improved labor & equipment utilization Better inventory planning & scheduling Reduced inventory levels without reduced

customer service

SUPPORT THE PROFIT PLAN SUPPORT THE CUSTOMER INSURE REALISTIC PLANS LEAD CHANGE MANAGE INVENTORY MAKE DECISIONS -RESOLVE ISSUES MEASURE PERFORMANCE BUILD TEAM WORK!

SALES & OPERATIONS PLANNING OBJECTIVES

MANUFACTURING RESOURCE PLANNING (MRP II)

Expanded MRP with and emphasis placed on integration Financial planning Marketing Engineering Purchasing Manufacturing

MANUFACTURING RESOURCE PLANNING (MRP II)

Feedback: feedback from the shop floor on how the work has progressed, to all levels of the schedule so that the next run can be updated on a regular basis.

Resource Scheduling: scheduling capability of the resources

Batching Rules 'Lot for Lot' means batches that match the orders. Economic Batch Quantity (EBQ) is calculated to minimize

the cost through balancing the set up cost against the cost of stock.

'Part Period Cover' means making batches whose size cover a fixed period of demand.

Software Extensions Rough Cut Capacity Planning (RCCP), an initial attempt to

match the order load to the capacity available, Sales Order Processing Cost accounting

Data Accuracy

Enterprise resource planning (ERP): An expanded effort to integrate standardized

record keeping that will permit information sharing throughout the organization

Strategic considerationsHigh initial costHigh cost to maintainFuture upgradesTraining

See ERP courses in the course catalog

ENTERPRISE RESOURCE PLANNING (ERP)

EXPERT SCHEDULER (EXSCHED)

ExSched is a software package designed specially for production resources scheduling on the shop floor.

It is an Advanced Planning and scheduling solution.

It simulates the shop floor environment and provides the most effective and efficient scheduling for jobs.

The software uses the Discrete Event Simulation technique to schedule jobs. Using built-in decision rules ExSched assigns priorities to waiting jobs, thereby resolving conflicts among competing jobs.

The package keeps track of the current status of each and every job. 

Based on the current status and the process sheet data ExSched can forecast the completion time of jobs.

SALIENT FEATURES OF EXSCHED

On-line visual graphical interface

Can work with different databases

Charts for schedules

Load charts for facilities

Print-outs for job routings

Customized reports

Has a ‘what if’ facility, wherein users can try out various permutations and combinations of job mix, priorities, capacities etc. and select the most appropriate plan

4 WAYS OF WORKING OF EXSCHED

Takes user input/constraints from the excel spreadsheet and parses through it.

Converts the input into an executable SICStus program.

Executes the generated SICStus program using the back end SICStus engine.

Displays the result of execution in the spreadsheet.

HOW EXSCHED FUNCTIONS?

Constraint Logic Programming:

Conventional programming languages such as C and Java do not provide adequate support for solving CSPs (Constraint solving problems)

Traditional Logic based programming languages like Prolog on the other hand are better than conventional programming languages but are inefficient as compared to constraint logic programming (CLP) languages.

This is because logic based languages use the “Generate and Test” paradigm. When the generate-and-test strategy is used, constraints are applied after the values have been chosen for the unknown variables.

Knowledgesheet Paradigm:

The main idea behind the development of Knowledgesheet was to generalize the functions to constraints/predicates.

Knowledgesheet consists of a two dimensional array of cells. Each cell acts as an unbound variable.

When a problem is to be solved, it is modeled into a two dimensional structure and constraints are imposed on the cells.

The knowledge sheet then gathers the input from the cells and converts it into an executable constraint logic program.

The generated CLP program is then executed to print the results onto an output file.

Finally, the Knowledgesheet reads the output generated and displays it in the corresponding cells.

VISUAL INTERFACE

The visual interface of this tool is the same as that of the normal Microsoft Excel spreadsheet except that it has a new menu item called “Constraint Solve” with various options. These options are divided into five major categories:

Macros to facilitate copying cells/formulas with and without formatting

Macros for some In-Built Functions Macros for Arithmetic Functions Macros for creating Auxiliary Tables Macros for executing the problem and for viewing

the solution

EXAMPLE: EMPLOYEE SCHEDULING

SOLUTION