Introduction To Materials Management: Chapter 4 - Material Requirements Planning

Introduction to Materials Management
Chapter 4 Material Requirements Planning
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Independent versus Dependent Demand

Independent Demand
Not related to demand for other assemblies or products, instead from outside sources Generally forecasted demand
Dependent Demand
Generally related to production of an end product (as defined on the MPS) Can be calculated instead of forecasted
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed. 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Dependent Demand Approach Materials Requirement Planning (MRP)

Major Objectives of MRP
Determine Requirements Calculated to meet product requirements defined in the MPS
What to order How much to order When to order When to schedule delivery
Keep Priorities Current

Links To Other MPC Functions
Figure 4.2 Manufacturing planning and control systems

Major Inputs to MRP

Master Production Schedule quantities and times Inventory records of all items to be planned
Planning factors such as lead times, order quantities, and safety stock Current status of each item
Bills of material for MPS items

Sample Bill of Materials
Figure 4.3 Simplified bill of material

Bill of Material Points

The BOM shows all parts to make one of the item Each part has one, and only one, part number A part is defined by form, fit, and function any change requires a new part number
Sample Product Tree for the BOM
Figure 4.4 Product tree
Breaking Down the BOM into More Detail the Multilevel Bill
Figure 4.5 Multilevel bill

Indented BOM Use Indentation to Show Parent-Component Relationships
Figure 4.8 Indented bill of material

Planning Bills of Material

Artificial grouping of components for Planning Purposes Used to simplify
Forecasting Planning Master Scheduling
Represent an average, not buildable product

Sample Planning BOM
Figure 4.9 Planning bill

Major Uses for Bills of Material

Defines the product Provides method for design change control Planning What is needed and when Order entry order configuration and pricing Production Parts needed to assemble a product Costing material cost of goods sold
Basic MRP Record
Figure 4.15 Basic MRP record

Some Key Terms

Lead time span of time for a process Exploding process of multiplying requirements by usage to get BOM requirements Offsetting Placing requirements in the proper period based on lead time Planned orders Orders planned during the explosion, but not yet released for processing Low-level code lowest level on which a part resides on the Bill of Materials
Some Key Terms, Continued

Scheduled receipts Open orders released for processing (production or purchase) scheduled to be received at a defined time. Gross Requirements Total of a component needed to meet requirements not taking any existing inventory into account Net Requirements Actual amount of a component needed to meet requirement after existing requirements taken into account
Sample Material Requirements Plan
Figure 4.19 Completed material requirements plan

Sample Multiproduct MRP Explosion
Figure 4.20 Multiproduct MRP explosion

Points About the MRP Record

Current time beginning of first period (often called time buckets) Items considered available at beginning of period Quantity in Projected Available row considered at end of period Current period often called action bucket action should be taken to avoid a future problem
Planner Responsibilities for MRP

Launch Orders Production or Purchasing Reschedule orders as required Reconcile errors and search for causes Solve critical material shortages
Replan Expedite
Coordinate with other functions to resolve problems

Other Key Terms

Firm Planned orders Orders not yet released, but frozen in quantity and time to reduce system nervousness Exception messages messages generated by the computer signaling planner action needed Bottom-up replanning actions to correct for changed conditions made as low as possible in the product structure

Introduction To Materials Management: Chapter 4 - Material Requirements Planning

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Introduction To Materials Management: Chapter 4 - Material Requirements Planning

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Introduction to Materials Management

Chapter 4 Material Requirements Planning

Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.

Independent versus Dependent Demand

Dependent Demand Approach Materials Requirement Planning (MRP)

Keep Priorities Current

Links To Other MPC Functions

Figure 4.2 Manufacturing planning and control systems

Major Inputs to MRP

Bills of material for MPS items

Sample Bill of Materials

Figure 4.3 Simplified bill of material

Bill of Material Points

Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.

Sample Product Tree for the BOM

Figure 4.4 Product tree

Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.

Figure 4.5 Multilevel bill

Indented BOM Use Indentation to Show Parent-Component Relationships

Figure 4.8 Indented bill of material

Planning Bills of Material

Represent an average, not buildable product

Sample Planning BOM

Figure 4.9 Planning bill

Major Uses for Bills of Material

Basic MRP Record

Figure 4.15 Basic MRP record

Some Key Terms

Some Key Terms, Continued

Sample Material Requirements Plan

Figure 4.19 Completed material requirements plan

Sample Multiproduct MRP Explosion

Figure 4.20 Multiproduct MRP explosion

Points About the MRP Record

Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.

Planner Responsibilities for MRP

Coordinate with other functions to resolve problems

Other Key Terms

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