Material requirements planning (MRP) is a production planning, scheduling, and inventory control system used

to manage manufacturing processes. Most MRP systems aresoftware-based, while it is possible to conduct MRP by
hand as well. An MRP system is intended to simultaneously meet three objectives:

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

Maintain the lowest possible material and product levels in store

Plan manufacturing activities, delivery schedules and purchasing activities.

Problems with MRP systems[edit]

First problem with MRP systems - the integrity of the data. If there are any errors in the inventory data,
the bill of materials (commonly referred to as 'BOM') data, or the master production schedule, then the output
data will also be incorrect

Second problem - systems require that the user specify how long it will take for a factory to make a product
from its component parts (assuming they are all available). Additionally, the system design also assumes
that this "lead time" in manufacturing will be the same each time the item is made, without regard to

quantity being made, or other items being made simultaneously in the factory.
MRP will plan production so that the right materials are at the right place at the right time. MRP determines the
latest possible time to product goods, buy materials and add manufacturing value. Proper Material Requirements
Planning can keep cash in the firm and still fulfill all production demands. It is the single most powerful tool in
guiding inventory planning, purchase management and production control. MRP is easy to operate and adds
dramatically to profits.
MRP INPUTS
The information input into MRP systems comes from three main sources: a bill of materials, a master schedule, and
an inventory records file. The bill of materials is a listing of all the raw materials, component parts, subassemblies,
and assemblies required to produce one unit of a specific finished product. Each different product made by a given
manufacturer will have its own separate bill of materials.
The master schedule outlines the anticipated production activities of the plant. Developed using both internal
forecasts and external orders, it states the quantity of each product that will be manufactured and the time frame in
which they will be needed.
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.

MRP PROCESSING
Using information culled from the bill of materials, master schedule, and inventory records file, an MRP system
determines the net requirements for raw materials, component parts, and subassemblies for each period on the
planning horizon. MRP processing first determines 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 main outputs from MRP include three primary reports and three secondary reports.
BENEFITS AND DRAWBACKS OF MRP
MRP systems offer a number of potential benefits to manufacturing firms. Some of the main benefits include
helping production managers to minimize inventory levels and the associated carrying costs, track material
requirements, determine the most economical lot sizes for orders, compute quantities needed as safety stock, allocate
production time among various products, and plan for future capacity needs.
MRP systems also have several potential drawbacks. First, MRP relies upon accurate input information. If a small
business has not maintained good inventory records or has not updated its bills of materials with all relevant
changes, it may encounter serious problems with the outputs of its MRP system.

The vendor selection process can be a very complicated and emotional undertaking if
you don't know how to approach it from the very start. Here are five steps to help you
select the right vendor for your business. This guide will show you how to analyze your
business requirements, search for prospective vendors, lead the team in selecting the
winning vendor and provide you with insight on contract negotiations and avoiding
negotiation mistakes.
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1. Analyze the Business Requirements

Before you begin to gather data or perform interviews, assemble a team of people who
have a vested interest in this particular vendor selection process. The first task that the
vendor selection team needs accomplish is to define, in writing, the product, material or
service that you are searching for a vendor. Next define the technical and business
requirements. Also, define the vendor requirements. Finally, publish your document to
the areas relevant to this vendor selection process and seek their input. Have the team
analyze the comments and create a final document. In summary:
1.

Assemble an Evaluation Team

2.

Define the Product, Material or Service

3.

Define the Technical and Business Requirements

4.

Define the Vendor Requirements

5.

Publish a Requirements Document for Approval

Read more about How to Analyze Business Requirements

2. Vendor Search

Now that you have agreement on the business and vendor requirements, the team now
must start to search for possible vendors that will be able to deliver the material, product
or service.
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The larger the scope of the vendor selection process the more vendors you should put
on the table. Of course, not all vendors will meet your minimum requirements and the
team will have to decide which vendors you will seek more information from. Next write
aRequest for Information (RFI) and send it to the selected vendors. Finally, evaluate
their responses and select a small number of vendors that will make the "Short List" and
move on to the next round. In summary:
1.

Compile a List of Possible Vendors

2.

Select Vendors to Request More Information From

3.

Write a Request for Information (RFI)

4.

Evaluate Responses and Create a "Short List" of Vendors

Read more about How to Accomplish a Vendor Search

3. Request for Proposal (RFP) and Request for Quotation (RFQ)

The business requirements are defined and you have a short list of vendors that you
want to evaluate. It is now time to write a Request for Proposal or Request for Quotation.
Which ever format you decide, your RFP or RFQ should contain the following sections:
1.

Submission Details

2.

Introduction and Executive Summary

3.

Business Overview & Background

4.

Detailed Specifications

5.

Assumptions & Constraints

6.

Terms and Conditions

7.

Selection Criteria

4. Proposal Evaluation and Vendor Selection

The main objective of this phase is to minimize human emotion and political positioning
in order to arrive at a decision that is in the best interest of the company. Be thorough in
your investigation, seek input from all stakeholders and use the following methodology
to lead the team to a unified vendor selection decision:
1.

Preliminary Review of All Vendor Proposals

2.

Record Business Requirements and Vendor Requirements

3.

Assign Importance Value for Each Requirement

4.

Assign a Performance Value for Each Requirement

5.

Calculate a Total Performance Score

6.

Select a the Winning Vendor

5. Contract Negotiation Strategies

The final stage in the vendor selection process is developing a contract
negotiationstrategy. Remember, you want to "partner" with your vendor and not "take
them to the cleaners." Review your objectives for your contract negotiation and plan for
the negotiations be covering the following items:
1.

List Rank Your Priorities Along With Alternatives

2.

Know the Difference Between What You Need and What You Want

3.

Know Your Bottom Line So You Know When to Walk Away

4.

Define Any Time Constraints and Benchmarks

5.

Assess Potential Liabilities and Risks

6.

Confidentiality, non-compete, dispute resolution, changes in requirements

7.

Do the Same for Your Vendor (i.e. Walk a Mile in Their Shoes)

6. Contract Negotiation Mistakes

The smallest mistake can kill an otherwise productive contract negotiation process.
Avoid these ten contract negotiation mistakes and avoid jeopardizing an otherwise
productive contract negotiation process.

Production planning
Production planning is the planning of production and manufacturing processes in a company or
industry. It utilizes the resource allocation of activities of employees, materials and production
capacity, in order to serve different customers.[1]
Different types of production methods, such as single item manufacturing, batch production, mass
production, continuous production etc. have their own type of production planning. Production
planning can be combined with production control into production planning and control, or it can be
combined and or integrated into enterprise resource planning.
Production planning is used in companies in several different industries, including agriculture,
industry, amusement industry, etc.

Production control is the activity of monitoring and controlling any particular production or
operation. Production control is often run from a specific control room or operations room.
Production control is the activity of monitoring and controlling a large physical facility or physically
dispersed service. It is a "set of actions and decision taken during production to egulate output and
obtain reasonable assurance that the specification will be met."

Related types of control in organizations[edit]

Production control is just one of multiple types of control in organizations. Most commons other
types are:

Management control, one of the managerial functions like planning, organizing, staffing and
directing. It is an important function because it helps to check the errors and to take the
corrective action so that deviation from standards are minimized and stated goals of the
organization are achieved in a desired manner.

Inventory control, the supervision of supply, storage and accessibility of items in order to
ensure an adequate supply without excessive oversupply.

Quality control, the process by which entities review the quality of all factors involved in
production.

Acceptance sampling
From Wikipedia, the free encyclopedia

Acceptance sampling uses statistical sampling to determine whether to accept or reject a

production lot of material. It has been a common quality control technique used in industry. It is
usually done as products leave the factory, or in some cases even within the factory. Most often a
producer supplies a consumer a number of items and a decision to accept or reject the lot is made
by determining the number of defective items in a sample from the lot. The lot is accepted if the
number of defects falls below where the acceptance number or otherwise the lot is rejected. [1]
A wide variety of acceptance sampling plans are available.

A point to remember is that the main purpose of acceptance

sampling is to decide whether or not the lot is likely to be
acceptable, not to estimate the quality of the lot.

SO 9000
From Wikipedia, the free encyclopedia

This article relies too much on references to primary sources. Please

improve this article by adding secondary or tertiary sources. (March 2012)

The ISO 9000 family of quality management systems standards is designed to help organizations
ensure that they meet the needs of customers and other stakeholders while meeting statutory and
regulatory requirements related to a product.[1] ISO 9000 deals with the fundamentals of quality
management systems,[2] including the eight management principles upon which the family of
standards is based.[3] [2][4] ISO 9001 deals with the requirements that organizations wishing to meet
the standard must fulfill.[5]
Third-party certification bodies provide independent confirmation that organizations meet the
requirements of ISO 9001. Over one million organizations worldwide[6] are independently certified,
making ISO 9001 one of the most widely used management tools in the world today. However, the
ISO certification process has been criticized[7][8] as being wasteful and not being useful for all
organizations.[9][10]
The ISO 9000 family addresses various aspects of quality management and contains some of ISOs
best known standards. The standards provide guidance and tools for companies and organizations
who want to ensure that their products and services consistently meet customers requirements, and
that quality is consistently improved.
Standards in the ISO 9000 family include:

ISO 9001:2008 - sets out the requirements of a quality management system

ISO 9000:2005 - covers the basic concepts and language
ISO 9004:2009 - focuses on how to make a quality management system more
efficient and effective
ISO 19011:2011 - sets out guidance on internal and external audits of quality
management systems.

ISO 9001:2008
ISO 9001:2008 sets out the criteria for a quality management system and is the only standard in the
family that can be certified to (although this is not a requirement). It can be used by any organization,
large or small, regardless of its field of activity. In fact ISO 9001:2008 is implemented by over one
million companies and organizations in over 170 countries.
This standard is based on a number of quality management principles including a strong customer
focus, the motivation and implication of top management, the process approach and continual
improvement. These principles are explained in more detail in the pdf Quality Management
Principles. Using ISO 9001:2008 helps ensure that customers get consistent, good quality products
and services, which in turn brings many business benefits.

Certification to ISO 9001:2008

Checking that the system works is a vital part of ISO 9001:2008. An organization must perform
internal audits to check how its quality management system is working. An organization may decide

to invite an independent certification body to verify that it is in conformity to the standard, but there is
no requirement for this. Alternatively, it might invite its clients to audit the quality system for
themselves. Read more about certification to management system standards.

1987 version[edit]
ISO 9000:1987 had the same structure as the UK Standard BS 5750, with three "models" for quality
management systems, the selection of which was based on the scope of activities of the
organization:

ISO 9001:1987 Model for quality assurance in design, development, production, installation,
and servicing was for companies and organizations whose activities included the creation of new
products.

ISO 9002:1987 Model for quality assurance in production, installation, and servicing had
basically the same material as ISO 9001 but without covering the creation of new products.

ISO 9003:1987 Model for quality assurance in final inspection and test covered only the final
inspection of finished product, with no concern for how the product was produced.

ISO 9000:1987 was also influenced by existing U.S. and other Defense Standards ("MIL SPECS"),
and so was well-suited to manufacturing. The emphasis tended to be placed on conformance with
procedures rather than the overall process of management, which was likely the actual intent. [citation
needed]

1994 version[edit]
ISO 9000:1994 emphasized quality assurance via preventive actions, instead of just checking final
product, and continued to require evidence of compliance with documented procedures. As with the
first edition, the down-side was that companies tended to implement its requirements by creating
shelf-loads of procedure manuals, and becoming burdened with an ISO bureaucracy. In some
companies, adapting and improving processes could actually be impeded by the quality system. [citation
needed]

2000 version[edit]
ISO 9001:2000 replaced all three former standards of 1994 issue, ISO 9001, ISO 9002 and ISO
9003. Design and development procedures were required only if a company does in fact engage in
the creation of new products. The 2000 version sought to make a radical change in thinking by

actually placing the concept of process management front and center ("Process management" was
the monitoring and optimisation of a company's tasks and activities, instead of just inspection of the
final product). The 2000 version also demanded involvement by upper executives in order to
integrate quality into the business system and avoid delegation of quality functions to junior
administrators. Another goal was to improve effectiveness via process performance metrics:
numerical measurement of the effectiveness of tasks and activities. Expectations of
continual process improvement and tracking customer satisfaction were made explicit.
ISO 9000 Requirements include:

Approve documents before distribution;

Provide correct version of documents at points of use;

Use your records to prove that requirements have been met; and

Develop a procedure to control your records.

2008 version[edit]
ISO 9001:2008 in essence re-narrates ISO 9001:2000. The 2008 version only introduced
clarifications to the existing requirements of ISO 9001:2000 and some changes intended to improve
consistency with ISO 14001:2004. There were no new requirements. For example, in ISO
9001:2008, a quality management system being upgraded just needs to be checked to see if it is
following the clarifications introduced in the amended version.
ISO 9001 is supplemented directly by two other standards of the family:

ISO 9000:2005 "Quality management systems. Fundamentals and vocabulary"

ISO 9004:2009 "Managing for the sustained success of an organization. A quality

management approach"

Other standards, like ISO 19011 and the ISO 10000 series, may also be used for specific parts of the
quality system.

ISO 14000
From Wikipedia, the free encyclopedia

This article includes a list of references, related reading or external links,

but its sources remain unclear because it lacksinline
citations. Please improve this article by introducing more precise
citations. (July 2014)

ISO 14000 is a family of standards related to environmental management that exists to help
organizations (a) minimize how their operations (processes, etc.) negatively affect the environment
(i.e., cause adverse changes to air, water, or land); (b) comply with applicable laws, regulations, and
other environmentally oriented requirements, and (c) continually improve in the above.
ISO 14000 is similar to ISO 9000 quality management in that both pertain to the process of how a
product is produced, rather than to the product itself. As with ISO 9000, certification is performed by
third-party organizations rather than being awarded by ISO directly. The ISO 19011 audit standard
applies when auditing for both 9000 and 14000 compliance at once.
ISO 14001 sets out the criteria for an Environmental Management System (EMS). It does not state
requirements for environmental performance, but maps out a framework that a company or
organization can follow to set up an effective EMS. It can be used by any organization that wants to
improve resource efficiency, reduce waste, and drive down costs. Using ISO 14001 can provide
assurance to company management and employees as well as external stakeholders that
environmental impact is being measured and improved.[4] ISO 14001 can also be integrated with
other management functions and assists companies in meeting their environmental and economic
goals.

List of ISO 14000 series standards[edit]

ISO 14001 Environmental management systemsRequirements with guidance for use

ISO 14004 Environmental management systemsGeneral guidelines on principles, systems

and support techniques

ISO 14006 Environmental management systemsGuidelines for incorporating ecodesign

ISO 14015 Environmental assessment of sites and organizations

ISO 14020 series (14020 to 14025) Environmental labels and declarations

ISO 14030 discusses post-production environmental assessment

ISO 14031 Environmental performance evaluationGuidelines

ISO 14040 series (14040 to 14049), Life Cycle Assessment, LCA, discusses pre-production
planning and environment goal setting.

ISO 14046 sets guidelines and requirements for water footprint assessments of products,
processes, and organizations. Includes only air and soil emissions that impact water quality in
the assessment.