CAPACITY

PEPITO, SEAN ERIK AL

PLANNING
BSMX 3-A

MRP, MRP II, ERP

WHAT IS CAPACITY PLANNING?
OK, WHAT IS CAPACITY
PLANNING REALLY?
Capacity, essentially is the maximum output of something.

This is the answer to questions such as:

How many people can enter a room? Finding out the capacity of a given project is called Capacity
How much food can you eat? Requirement Planning (CRP). During CRP, one would need to
How long can you study before getting bored and start procrastinating instead? find the following:

1.) Capacity Requirements (determination of service level or

production level requirement) - Is the capacity that your current
project must have.

2.) Current Capacity (analysis of the current capacity) - Exactly

what it means, the capacity your project currently has.

3.) Potential Future Capacity (planning for the capacity

required in future) - The capacity that you might need in the
future should there be any changes in the future.
MATERIALS
REQUIREMENT
PLANNING
Manufacturing is complex. There
are many tasks involved in the
manufacturing process, from
maintaining accurate stock levels
to controlling production functions.

Manufacturers used to manually

plan production and manage
purchasing activities. That was

MRP MRP II ERP

before computers dominated the
industry. But today there are
software solutions available to
help handle these complex tasks. The first generation of MRP MRP II enables better supply ERP is an extended version
systems, or MRP I, was chain visibility and enhances of MRP II to include all core
Materials Requirements Planning designed to recognize the your relationships with suppliers. business functions and
has undergone many changes relationships between raw It improves a company’s bottom processes. It manages
over the years, here are the 3 key materials, parts, assemblies, line through advanced planning, production and inventory,
takeaways. and products. and forecasting capabilities. It is finances and accounting,
more advanced than MRP I and sales, CRM, HR, and more.
extends to other areas of the
company. MRP II helps
manufacturers be more
strategic.
INPUTS, PROCESS AND
OUTPUTS OF MRP
INPUTS PROCESS OUTPUTS

1. Master 1. MRP Computer 1. Changes

Schedule Programs 2. Order
2. Lead Time a. The MRP Releases
3. Bill of Process 3. Planned
Materials Order
4. Inventory Schedules
Status 4. Exception
Reports
5. Planning
Reports
6. Performance
Control
Reports
INPUTS
MASTER SCHEDULE
The master schedule outlines the planned production activities of the plant. Based on the forecasting and the orders
received from the customers markets, it states the quantity of each product that will be manufactured and the time
frame in which they will be manufactured. The master schedule divides the planning horizon into a number of
weeks. The schedule covers a time frame long enough to produce the final product. This total production time
consists of the sum of the lead times of all the related fabrication and assembly operations of the components and
subcomponents. Master schedules are generated according to demand and without regard to capacity.
INPUTS
LEAD TIME
Simply put, lead time refers to the total time it takes for a task/project to be completed, from the
moment it starts till it ends. Note that it includes both the time spent actively working on the task as
well post-processing time, such as any idle time or delays in between.
LEARNING MRP
WITH STAPLERS
A firm manager receives an order of 500 staplers. The
order is to be delivered at the end of 10 the week from
now. He had 200 staplers in the inventory at the time of
the order receipts.

Using MRP, determine the

schedules for the orders to be released for the
manufacturing and assemblies of the components
so that the 500 staplers can be delivered on time.
INPUTS
BILL OF MATERIALS
The bill of materials is a listing of all the raw materials, component parts, sub assemblies and
assemblies required to produce one unit of a specific finished product. MRP uses the
bill of materials to determine the quantity of each component that is needed to produce a certain
number of finished products. From this quantity, the system subtracts the quantity of that item
already in inventory to determine order requirements.
INPUTS
INVENTORY STATUS
The inventory records file provides an accounting of how much inventory is already on hand
or on order, and thus should be subtracted from the material requirements. The inventory records
file is used to track information on the status of each item by time period. This includes gross
requirements, scheduled receipts and the expected amount on hand. It includes other details for
each item as well, like the supplier, the lead time and the lot size.
 TOOL AND TECHNIQUE:
MRP COMPUTER PROGRAM
a software solution that helps manufacturers calculate more precisely
what materials they require, at what time, and in what quantities. Over
time MRPs developed more functionalities and most MRPs (known as MRP
II) now include detailed capacity planning, scheduling, shop floor
control, and other calculations.
MRP PROCESS
The MRP system determines the net requirements for raw
materials, component parts an subassemblies based on
the information gathered from the bill of materials, master
schedule and inventory records file. It determines the
gross material requirements, then subtracts out the
inventory on hand and adds back in the safety stock in
order to compute the net requirements.

The MRP process involves the following steps:

• Determine the gross requirements of a finished product.

• Determine the net requirements and when orders will be
released for fabrication or
subassembly.
• Net requirements = Total requirements – Available
inventory.
• Net requirements = (Gross requirements + Allocations) –
(On hand) − Scheduled receipts.
learning mrp
with staplers
A firm manager receives an order of 500 staplers. The
order is to be delivered at the end of 10 the week from
now. He had 200 staplers in the inventory at the time of
the order receipts.

Using MRP, determine the

schedules for the orders to be released for the
manufacturing and assemblies of the components
so that the 500 staplers can be delivered on time.
TOP
TOP 1
TOP 2
TOP 3
TOP F
MIDDLE
MIDDLE 1
MIDDLE 2
MIDDLE 3
MIDDLE 4
MIDDLE F
BASE
BASE 1
BASE 2
BASE 3
BASE F
FINAL STAPLES
FINAL STAPLES F
 outputs:
PRIMary reports

Changes Order Releases Planned Order Schedules

Planned order schedules delineate the quantity as well as timing of

future material orders.
Order releases give authorizations on orders to be made.
Changes to planned orders may include revisions or cancellations of
the time frame or quantity.
 outputs:
Secondary reports
Performance Control
Exception Reports Planning Reports
Reports

Performance control reports are used to keep a track of problems,

such as delivery dates and stock outs that have been missed out, in
order to assess system performance.
Planning reports are used to forecast future inventory requirements.
Exception reports are used to divert the attention of managers toward
key issues such as late orders, excessive scrap rates, etc.
Materials
requirement
planning
Manufacturing is complex. There
are many tasks involved in the
manufacturing process, from
maintaining accurate stock levels
to controlling production functions.

Manufacturers used to manually

plan production and manage
purchasing activities. That was
before computers dominated the
industry. But today there are
software solutions available to help
MRP MRP II ERP
handle these complex tasks.
The first generation of MRP MRP II enables better supply ERP is an extended version
systems, or MRP I, was chain visibility and enhances of MRP II to include all core
Materials Requirements Planning
designed to recognize the your relationships with suppliers. business functions and
has undergone many changes over
relationships between raw It improves a company’s bottom processes. It manages
the years, here are the 3 key
materials, parts, assemblies, line through advanced planning, production and inventory,
takeaways.
and products. and forecasting capabilities. It is finances and accounting,
more advanced than MRP I and sales, CRM, HR, and more.
extends to other areas of the
company. MRP II helps
manufacturers be more strategic.
DIFFERENCE
MRP MRP II

Lists only material requirements. Lists all needed requirements,

including equipment and
workforce.
Focuses only on manufacturing. Focuses on the all aspects of
production.
Prioritizes material scheduling Doesn’t prioritize, gives equal
and production. focus on all manufacturing
operations.
 OK, WHAT ABOUT ERP?
MAIN DIFFERENCE THINGS IT INCLUDES
INSERT FUNNY TEXT HERE

Unlike MRP (I or II), ERP has focus In addition to Manufacturing, it also has:
outside of the production side of the
company. Finance
Human Resources
In fact, ERP, as its name suggests, Sales
focuses on the Enterprise or Company Logistics
as a whole, using the MRP system to
manage the various aspects of the
company.