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Material Requirements Planning Operations Planning & Control for Supply Chain Management

Independent Vs. Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 A B(4) C(2) D(2) E(1) D(3) F(2) Independent Demand Items Dependent Demand Items

Independent Vs. Dependent Demand ,[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Inventory Systems for Dependent Demand ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Material Requirements Planning ,[object Object],[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 Create a production schedule to satisfy demand B(4) E(1) D(2) C(2) F(2) D(3) A Product Structure Tree for Assembly A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares)

Example - Dependent Demand ,[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 LT=1 day B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 4 B’s go into an A B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50 B Required 20 200 Order placement 20 200

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 LT=2 days (from A) B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50 B Required 20 200 Order placement 20 200

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 LT=2 days (spares) B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50 B Required 20 200 Order placement 20 200

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 2 C’s go into an A B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50 C Required 100 Order placement 100

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 LT=1 day (from A) B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50 C Required 100 Order placement 100

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 2 D’s go into a B B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 B Required 20 200 Order placement 20 200 C Required 100 Order placement 100 D Required 40 400 300 Order placement 40 400 300

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 3 D’s go into a C B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 B Required 20 200 Order placement 20 200 C Required 100 Order placement 100 D Required 40 400 300 Order placement 40 400 300

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 Demand for spares : 40+ 15 =55 B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 B Required 20 200 Order placement 20 200 C Required 100 Order placement 100 D Required 55 400 300 Order placement 55 400 300

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 LT=3 days (from B and C and spares) B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 B Required 20 200 Order placement 20 200 C Required 100 Order placement 100 D Required 55 400 300 Order placement 55 400 300

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 1 E goes into a B B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 B Required 20 200 Order placement 20 200 E Required 20 200 Order placement 20 200

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 LT=4 days (from B) B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 B Required 20 200 Order placement 20 200 E Required 20 200 Order placement 20 200

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 2 F’s go into a C B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 C Required 100 Order placement 100 F Required 200 Order placement

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 LT=1 day (from C) B(4) E(1) D(2) C(2) F(2) D(3) A Lead Times A: 1 day B: 2 days C: 1 day D: 3 days E: 4 days F: 1 day Demand Day 10: 50 A Day 8: 20 B (Spares) Day 6: 15 D (Spares) Item Day: 1 2 3 4 5 6 7 8 9 10 C Required 100 Order placement 100 F Required 200 Order placement 200

Example - Dependent Demand 250-450 Dr. Tom Bramorski Slide of 57 Item Day: 1 2 3 4 5 6 7 8 9 10 A Required 50 Order placement 50 B Required 20 200 Order placement 20 200 C Required 100 Order placement 100 D Required 55 400 300 Order placement 55 400 300 E Required 20 200 Order placement 20 200 F Required 200 Order placement 200

Master Production Schedule (MPS) ,[object Object],250-450 Dr. Tom Bramorski Slide of 57 Aggregate Plan (product groups) MPS (specific items)

Time Fences ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Time Fences 250-450 Dr. Tom Bramorski Slide of 57 8 15 26 Weeks Frozen Moderately Firm Flexible Firm Customer Orders Forecast and available capacity Capacity

Material Requirements Planning ,[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Production Planning Hierarchy 250-450 Dr. Tom Bramorski Slide of 57 Firm orders from known customers Forecast of demand from random customers Aggregate Product Plan Master Production Schedule (MPS) Material Requirements Planning (MRP) Engineering design changes Bill of Materials (BOM) file Inventory transactions Inventory records file Reports

Inputs To and Outputs From MRP 250-450 Dr. Tom Bramorski Slide of 57 Order Changes Planning Reports MRP System Inventory Transaction Data Bill of Materials File Master Production Schedule Inventory Status File Service-Parts Orders and Forecasts Performance Reports Inputs Outputs Planned Order Schedule Exception Reports

Bill of Materials (BOM) File A Complete Product Description ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Inventory Records File ,[object Object],[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Approaches to Processing MRP ,[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Net Change Approach ,[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Regenerative Approach ,[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Primary MRP Reports ,[object Object],[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Primary MRP Reports ,[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

More MRP Terminology ,[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

More MRP Terminology ,[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

More MRP Terminology ,[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],More MRP Terminology 250-450 Dr. Tom Bramorski Slide of 57

[object Object],[object Object],[object Object],[object Object],[object Object],Lot-Sizing in MRP 250-450 Dr. Tom Bramorski Slide of 57

[object Object],[object Object],[object Object],[object Object],Lot-Sizing in MRP 250-450 Dr. Tom Bramorski Slide of 57

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Lot-Sizing in MRP 250-450 Dr. Tom Bramorski Slide of 57

[object Object],[object Object],Lot-Sizing in MRP 250-450 Dr. Tom Bramorski Slide of 57

Closed Loop MRP 250-450 Dr. Tom Bramorski Slide of 57 Production Planning Master Production Scheduling Material Requirements Planning Capacity Requirements Planning Realistic? No Feedback Execute: Capacity Plans Material Plans Yes Feedback

Manufacturing Resource Planning (MRP II) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

Enterprise Resource Planning (ERP) ,[object Object],[object Object],[object Object],250-450 Dr. Tom Bramorski Slide of 57

MRP Example #2 250-450 Dr. Tom Bramorski Slide of 57 A(2) C(3) B(1) D(5) C(2) X Product Structure Tree for X Item Lead-time (weeks) On-hand quantity X 2 50 A 3 75 B 1 25 C 2 10 D 2 20

MRP Example #2 250-450 Dr. Tom Bramorski Slide of 57 Create a planned order release schedule The requirements for product X include 95 units (80 firm orders and 15 forecast) for X in week 10. In addition, there is independent demand for other items (spares), as shown in the MPS below: Week Item 1 2 3 4 5 6 7 8 9 10 X 95 A 12 B 7 C 10 D 15

Solution: MRP Example #2 250-450 Dr. Tom Bramorski Slide of 57

MRP Example #3 250-450 Dr. Tom Bramorski Slide of 57 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Create a planned order release schedule

Solution: MRP Example #3 250-450 Dr. Tom Bramorski Slide of 57

The End 250-450 Dr. Tom Bramorski Slide of 57

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