MRP, MRP II &
ERP
The TOYOTA Way
MATERIAL RESOURCE PLANNING (MRP
I)
Material Requirements Planning (MRP)
is a software based production planning
and 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
Changes
Order releases
Master
schedule Planned-order
schedules
Primary
reports Exception reports
Bill of Planning reports
materials MRP computer Secondary
Performance-
programs reports control
reports
Inventory
records Inventory
transaction
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.
MRP PLANNING
Develop a tentative Use MRP to
master production simulate material
schedule requirements
Convert material Revise tentative
requirements to master production
resource requirements schedule
No
Can
Is shop capacity be
capacity No
changed to meet
adequate? requirements
Yes Yes
Firm up a portion Change
of the MPS capacity
MRP OUTPUTS
Planned orders - schedule indicating the amount and timing of
future orders.
Orderreleases - 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
SALES & OPERATIONS PLANNING
OBJECTIVES
SUPPORT THE PROFIT PLAN
SUPPORT THE CUSTOMER
INSURE REALISTIC PLANS
LEAD CHANGE
MANAGE INVENTORY
MAKE DECISIONS -RESOLVE ISSUES
MEASURE PERFORMANCE
BUILD TEAM WORK!
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)
Enterprise resource planning (ERP):
An expanded effort to integrate standardized record keeping that
will permit information sharing throughout the organization
Strategic considerations
High initial cost
High cost to maintain
Future upgrades
Training
See ERP courses in the course catalog
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
