Submitted to: Submitted by:

Mansi Saxena Vishakh Kumar

Sachin Kumar
Vishal Kumar & Rajdeep
A-3
 Contents of Presentation
 Relevance of the material requirement planning.

 MRP system inputs &output

 Role in production

 Advantage disadvantage
Material Requirements Planning
(MRP)
Manufacturing computer information
system
Determines quantity & timing of dependent
demand items 1 2 3
Gross Requirements
2 20
4
25
5
15
Scheduled Receipts 5 30
Available 25 23 33 33 8
Net Requirements 7
Planned Order Receipts 7
Planned Order Releases 7
 Material requirements
planning
Materials Requirements planning : Computer based
information system for ordering and scheduling of
dependent demand inventories.

 A manufacturing company to produce end items to

meet demand the availability of sufficient capacity
must be co-ordinate with the availability of all raw
material
 Function of MRP
Order planning and control

Priority planning and control

Providing a basis for planning capacity

requirement
 MRP depend on some factor
Cost estimate
Order entry
Inventory control
Bill of material
Purchasing
Manufacturing floor control and scheduling
invoicing
 Material requirement planning
five stage
 Target and marketing

 Development of offering

 Sales

 Superior experience

 Retention and win back

 Functional input Functional output

Change in product
design and product MRP New design in
corporation data
structure
 What MRP does
END
Master schedule for ITEM

MRP

Detail schedule for

RAW MATERIAL
&COMPONENTS

Used in the end product

 Operation of MRP system
Inputs process outputs

Inventory Inventory
status file transaction data

MPS Planned order

MRP
file schedule

Exception
B.O.M. file
reports
 Inventory Classifications

Inventory

Process Number & Demand

Other
stage Value Type

Raw Material WIP A Items Maintenance

Independent
Finished Goods B Items Dependent
Dependent
C Items Operating
 Typical Focus of the Master
Production Schedule
Make to Order Assemble to Order Stock to Forecast
or Forecast (Product Focus)
(Process Focus) (Repetitive) Schedule finished
Number of end product
items

Typical focus of the

Schedule
master production
Schedule modules
schedule
orders
Number of
inputs
Print shop Motorcycles, autos, Steel, Beer,
Examples:
Machine shop TVs, fast-food Bread Light
Fine dining restaurant restaurant bulbs, Paper
 Structure of the MRP System
Master Production
BOM
Schedule
(Bill-of-Material) MRP by period report

Lead Times
MRP by date report
(Item Master File)
MRP
Programs Planned orders report
Inventory Data

Purchase requirements

Purchasing data
Exception reports
 The Planning Process
Production Plan Master Production
Schedule

Material
Requirements
Plan

Capacity
Requirements
Plan

No Realistic??
Yes
Execute Capacity
Plans

Execute Material
Plans
 Purpose of MRP
Control inventory level
Assign operating priorities
Assign capacity to load production system

The theme of MRP is the “getting the right

materials to the right place at the right time in
right quantities”.
 Effect on MRP

End product
Usually forecast
Conventional inventory control applicable
Raw material
Component parts
subassemblies
 Objective of MRP

To improve customer service by meeting

delivery schedules promised and
shortening delivery lead times

To reduce inventory costs by reducing

inventory levels

To improve plant operating efficiency by

better use of productive resource
 Three factor of MRP technique
The MRP technique as a requirements
calculator
The MRP A manufacturing ,planning and
control system
The MRP A manufacturing resource
planning system
 Why requirement of MRP
 How can we increase the production

 How can we more utilization of the things

 How can we improve the quality

 How can we give the best services

 For increase the profit

Independent and Dependent
Demand
Independent Demand

A Dependent Demand

B(4) C(2)

D(2) E(1) D(3) F(2)

Independent demand is uncertain.

Dependent demand is certain.
 Dependent versus Independent
Demand

Item Materials With Materials With

Independent Demand Dependent Demand
Demand
Company Customers Parent Items
Source
Material
Finished Goods WIP & Raw Materials
Type
Method of
Forecast & Booked Calculated
Estimating
Customer Orders
Demand
Planning
EOQ & ROP MRP
Method
 Implementation of MRP
Management commitment
User involvement
Education and training
Selection of packages
Data accuracy
Realistic MPS
 MRP Requirements
Computer system
Mainly discrete products
Accurate bill-of-material
Accurate inventory status
99% inventory accuracy
Stable lead times
© 1984-1994 T/Maker Co.
 Bill-of-Material
Product Structure Tree

Bicycle(1)
P/N 1000

Handle Bars (1) Frame Assembly (1)

P/N 1001 P/N 1002

Wheels (2) Frame (1)

P/N 1003 P/N 1004
 Example
scissors SC

M Qty: 1
middle
R Qty: 1 L Qty: 1
Right side Left side

SC

M Qty: 2
R Qty: 1 L Qty: 1
 Example
Level Chair
0

1 Leg Back
Assembly Seat Assembly

Cross Side Cross Back

2 Legs (2)
bar Rails (2) bar Supports (3)

3
 MRP Input

On hand
Schedule receipt
Inventory at
Gross requirement for the + the end of = Net requirement
_ period for a period
for a period the period
 Example of MRP
order qty =70 week

lead time =4 week 1 2 3 4 5 6 7 8 9 10 11 12

safety stock40

project requirement 20 20 25 20 20 25 20 20 30 25 25 25

scheduled receipts 70 70 70 70

on hand at the end

of period 65 45 95 70 50 100 75 55 105 75 50 95 70

planned order
release 70 70 70
 Some Example
If Maruti suzuki decided 1000 units of alto
cars model (finished goods ) dec2009
based on forecast
Dell computer manufacture who
planned to produce 10000 units of desk top
Sony Eric son mobile company is
planning to produce 50000 units of
mobile with camera 4.0 mega pixel
capacity
 Advantage of MRP
Reduced idle time
Reduced set up time
Better customer services
Better response to market demands
Helps managers to use the planned
schedule
 Disadvantage of MRP
Lack of top management commitment

MRP was presented and perceived as a

complete and stand alone system to run a
firm rather than as part of the total system

MRP can be made to function with just in

time production system
 Problem in using MRP
Preparation of MPS
Maintaining accurate of B.O.M. files
In correct stock (inventory ) status
Unrealistic lead times