mrp ccm.pdf
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Material Requirements Planning
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Material flow management is based on apredefined schedule which takes into
account demand and manufacturing leadtime
Componentmanufacturing
Componentwarehouse
Kit assembly
FP assembly
Kit warehouse
Finished product warehouse
T i m e
a n d
q u a n t i t
y
Order forecast
Orders
Material
Flows:
Material Requirements Planning - 'Push' systems (M.R.P.)
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Material Requirements Planning
It is based on the net requirements calculated by exploding, atcomponent level, certain predetermined finished product productionplans.
It requires each dependent-demand component or material (child) tobe ordered or manufactured based on the corresponding independent-demand component/set (parent) requirement.
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Material Requirements Planning
What it is
An MRP system is a decision-makingsupport tool which - by processing datareported in the Master ProductionSchedule - provides a complete pictureof:
What (which sets/subsets/parts/rawmaterials are needed to makefinished products)
How much
When to purchase/manufacture
Working principles
It explodes the production orderplan stemming from the MPS and itsuggests a time schedule for all bill-of-material levels (semi-finishedproducts, components, externalmaterials)
It synchronises activities andlogistic flows inside and outside ofthe production unit
It keeps semi-finished productstock levels at a minimum (WIP)
It inputs Capacity RequirementsPlanning
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Assemble to stockIndustry Type
MRP: Industry Application and Expected Benefits
Examples Expected BenefitsCombines multiple parts into a finishedproduct, which is then stocked in inventory to satisfycustomer demand. Examples: watches, tools, appliances.
High
Make to stock
Assemble to order
Make to order
Process
Low
High
High
Medium
Items are manufactured by machine rather thanassembled from parts. These are standard stock itemscarried in anticipation of customer demand. Examples:piston rings, electrical switches.
A final assembly is made from standard options thatthe customer chooses. Examples: trucks, generators,engines.
Items fabricated or assembled completely to customerspecification. Examples: turbine generators, heavy
machine tools.
Industries such as foundries, rubber and plastics,speciality paper, chemicals, paint, drug, foodprocessor.
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Master Production ScheduleIt indicates how much and when to produce:
finished products spare parts direct-sale materials and parts
Product structure (Bill of materials)Multi-levelFor each level of the bill of materials it defines:
links utilisation coefficient offset adjustment
Inventory level in warehouses and departmentsPhysical stock
Safety inventory
Running orders (released to production or to asupplier)
Booked quantityReorder policy
Batch size
Manufacturing time schedule
External material and componentpurchase order schedule
Customer order processability
Abnormality and problemreporting:
expediting expired orders
anticipating a previouslyreleased order
cancelling an order that hasalready been sent to thesupplier
M.R.P.
Material Requirements Planning (M.R.P.)
Output
informationInput data
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The system generates so-called
'Order proposals (planned orders)'- (status = P) -
These are subsequently analysed by theprogrammer and turned into
'Confirmed orders'- (status = F) -
which can no longer be automaticallymodified by the system, but only directly by
the programmer.
Material Requirements Planning - M.R.P. order types
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Design andtechnicalchanges
MaterialRequirements
Planning
Orderportfolio
ForecastsProduction
capacityplanning Material
movements
MasterProductionSchedule
Bill of materialsCyclesLead times...
Stock
BookedOrders...
Productstructure
Inventorylevel
Order processability andcritical points
Staff MeansSuppliers
Sales
New ordersExpeditingDelays...
Supply Production
Order loadingPrioritiesExpeditingLoads...
Material Requirements Planning Structure
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Bill ofmaterials
Production schedule(order plan)
Lead time
Batchproduction
Stock
Usagescraps
Manuf.explosion
Launchdates
OrdersNet
requirements
Grossrequirements
Production scraps
Master Production Schedule
A
B C
D E B D
D E
Starting from the independent-demand item production plan(bottom-level codes), MRP calculates gross and net quantity
and schedule requirements for all necessarymaterials/components by exploding each level of the bill ofmaterials
Material Requirements Planning: logical procedure
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The route for the MRP procedure
1. Collect the current stocks, runningorders, booked stocks
2. Evaluate how much to order internallyand externally1. Evaluate the stock during the previous
period2. Collect the planned replenishments and
gross requirements3. Calculate the stock for actual period
1. Define the order quantity andthe offset factor
2. Plan the reorder quantity
1. Anticipate the date order2. Explode the gross requirement of highlevel components
1. Collect the availability of bill of materialsand all management information (leadtime - order policy-provenance)
2. Explode the products bill of materialsand schedule it based on lead time
1. Choice the optimal batch production(Fixed EOQ, L4L, Dynamic EOQ)
Assign the order issues Assign the order issues66
Net requirementNet requirement44
Gross requirementGross requirement11
Plan replenishmentsPlan replenishments22
Evaluate the stockEvaluate the stock33
Set the batch productionSet the batch production55
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Material Requirements Planning - Requirement explosion
X
C
Z Y
Item "A"Stock:Safety inventory:% production scrap:Supply time.:Reorder policyE.O.Q.:
10%
170 pcs50 pcs
3 periodsFixed E.O.Q.150 pcs
Link Coeff. Offset factor (at assembly)
A - BA - C
21
+ 10%-----
A
B
---150--150-150-Order plan to be issued
773333778840----Net re quirements
150--150-150----Lot-sized re quirements
---150--150-150-Gross requirements of C from A
---330--330-330-Gross requirements of B from A
-------48--Orders in progress
7733337788552211--Scrap adjusted re quirements
7030307080502010--Availability adjusted requirements
00000002060120Initial availability
70303070805020304060Gross Total Requirements
20202020301010101010Gross External Requirements
50101050504010203050Gross Internal Requirements
10987654321Item "A"Periods
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Material Requirements Planning procedure
All the procedure's steps aretotally electronic.
A data processing of 100.000codes lasts about 10 minutes
Dont assume that the firstdata processing is
necessarily correct! Its veryimportant to run several
simulations to satisfyyourself as well as the
Master Production Schedule
Exercises
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Requirement on top of available stock for period 1, given an orderedquantity (for orders which have been already released) higher than zero(orders to be processed now)
Requirement on top of available stock for periods prior to the processingdate, given an ordered quantity (for orders which have already beenreleased) higher than zero (orders which should have been processedin the past)
Net current requirement for future period: PROCESSING DATE+LEAD TIME (orders to be issued now)
Net current requirement for periods prior to PROCESSING DATE +LEAD TIME (orders which should have been issued in the past)
No requirement on top of available stock up to PROCESSING DATE +n PERIODS, given an ordered quantity higher than zero (over-ordering)
CHECK
REORDER
EXPEDITING
ALARM
DELAY
Material Requirements Planning - Reporting (a few examples)
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?
INPUT OUTPUT
Material Requirements PlanningBasic problem posed by MRP
Too complex (requires too much information)
It requires a lot of 'discipline'
It is not problem solving oriented
It is difficult to understand correlations
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Then (and only then) our M.R.P. is going to work perfectly.What should be done?
Conditions for obtaining the minimum theoretical inventorywith MRP
If...1. Forecasts are good...
2. and well 'mixed' with orders
3. The Bill of materials is updated
4. All production cycles are updated andcorrect
5. Lead times do not change even in caseof absenteeism
6. Lead times are never forced out of thesystem (the boss does not say 'I'll seeto it')
7. Orders leave on time
8. and we are sure they were received
9. and meanwhile the lead time has notchanged
10. and meanwhile the BOM has notchanged.
11. Warehouse data is reliable
12. Data on W.I.P. is reliable
13. Nobody 'steals' materials14. 100% quality scraps are recorded
15. There is plenty of stock
16. Murphy is not holding it against us
17. .... (miscellaneous) ....
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Overall discipline!
MRP only when needed!
Streamline!
Reduce BOM levels.
Reduce number of
warehouses/buffersReduce Lead times
Reduce number of suppliers
JIT production islands
Avoid bottlenecks and manage 'onsite'
The information system may be oneof the bottlenecks!
C
A
B
B
C
Product A
A
B
C
A
B
C
the factory should not be a maze
but rather a highway
in otherwords...
Material Requirements Planning - What should be done?
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