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12 MRP - I - Ii - DRP - I - Ii
12 MRP - I - Ii - DRP - I - Ii
Popular concept in 1960&1970. Consists of a computer system, a manufacturing information system, building
on inventory, production scheduling and administering all inputs to production and a concept and philosophy
of management.
MRP system consists of a set of logically related procedures, decision rules, and records designed to
translate a master production schedule into time phased net inventory requirements and the planned
coverage of such requirement for each component item needed to implement schedule. An MRP system
re-plans net requirements and coverage as a result of changes in either the master schedule, demand, and
inventory status or product composition. MRP systems meet their objective by computing net
requirements for each inventory item, time-phasing them, and determining their proper coverage
OBJECTIVES
1. Ensure the availability of materials components and products for planned production and
customer delivery.
HOW? PROCESS
MRP starts with customer’s demand for the quantity of end product and the time when the products are
needed.
Then MRP explodes the time and need for components based upon the end product need. MRP System
focuses on inbound logistical area
MRP System uses following key elements:
MRP system has developed into its current incarnation in phases. First phase is called MRPI or
Materials Requirement Planning and the second phase is called MRPII or Manufacturing Resources
Planning
MRP I is a computer based production and inventory control system [soft ware] that attempts to
minimize inventories while maintaining adequate materials for production process.
Logistics Management TYBMS 1
WHEN DOES IT GET APPLIED?
ADVANTAGES OF MRP I
DISADVANTAGES OF MRP I
1. Due to small lot purchases high material acquisition costs and high ordering costs
2. Stock out costs are more as safety stock protection is low
3. A limitation of software as adapting to specific situations is difficult. So modification of the
software is necessary
MRP II
MRP I is updated and expanded to include financial and marketing and logistics elements. This newer
version is called Manufacturing Resources Planning or MRP II. Includes entire set of activities involved
in planning and control of production.
It consists of a variety of functions of modules and includes production planning, resource requirements
planning, master production scheduling, materials requirement planning [MRP I], shop floor control and
purchasing
Benefits of MRP II
Distribution requirement planning [DRP I] is defined as “the application of MRP principles to the
distribution environment [out bound logistics], integrating the special needs of distribution. It is a
dynamic model that looks at the time phased plans of events that effect inventory.
Distribution Resource Planning [DRP II] is an extension of DRP I. Distribution resources planning
applies the time phased logic of DRP I to replenish inventories in multi echelon warehousing systems.
Distribution resources planning extends DRP I to include the planning of key resources in a distribution
system –ware house space, man power levels, transport capacity [e.g. trucks, rail cars] and financial
flows.
As an extension of DRP I, DRP II uses the needs of distribution to drive the master schedule, controlling
the bill of materials and ultimately materials requirement planning. In essence, DRP I & DRP II are
outgrowths of MRP I & MRP II, applied to logistics activities of a firm.
♦ Coordinate the replenishment of SKUs coming from the same source [e.g. a company owned or
vendor’s plant.]
♦ Select transportation modes and carriers and shipment sizes more cost efficiently.
♦ Schedule shipping and receiving labour
♦ Develop a master production schedule for each SKU Accurate forecasts are essential ingredients for
successful DRP II system.
MARKETING BENEFITS
CONSTRAINTS
• System nervousness
• Uncertainty buffers
DRP MRP
1.scope Outbound logistics Inbound logistics
2.dependence for planning Market Production Schedule worked out
inputs based on past data in the organization
[Forecast based on past data]
3. Coordination Once the finished goods Up to Finished Goods starting
responsibility are produced. from raw materials production.
4. Nature of plan Short term and accurate
5. What is forecast? Finished goods Dependent demand
6. Planning Tool Schedule prepared for Production schedule
delivery of supplies in the
outbound logistical
network.