Chapter 14 ndash; Resource Planning (MRP and ERP).ppt

Chapter 14 – Resource Planning (MRP and ERP) Operations Management by R. Dan Reid Nada R. Sanders 2nd Edition ? Wiley 2005 PowerPoint Presentation by R.B. Clough - UNH Types of Demand There are two types of demand. Independent Demand Is the demand for finished products Does not depend on the demand of other products Needs to be forecasted Dependent Demand Is the demand derived from finished products Is the demand for component parts based on the number of end items being produced and is managed by the MRP system Evolution of Material Planning Systems Back in the sixties, manufacturing planning systems were reorder point systems that simply determined when and how much to order First MRP systems translated a master schedule of final products into time-phased net requirements for subassemblies, assemblies, and parts Closed-loop MRP included production planning, master scheduling, and capacity requirements In mid 1970’s, MRPII systems added functionality to plan and execute all internal functions An Overview of MRP MRP uses the concept of backward scheduling to determine how much and when to order and replenish The MPS module contains the authorized schedule The BOM module contains the product structure for each unique product The Inventory Record module keeps track of the inventory status for each item in the database MRP output includes schedules for all internal activities and parts as well as orders for all supply chain items Input/Output - MRP Process Objectives of MRP Determines the quantity and timing of material requirements Determines what to order (checks BOM), how much to order (lot size rules), when to place the order (need date minus lead time), and when to schedule delivery (on date needed) Maintain priorities In a changing environment, MRP reorganizes priorities to keep plans current and viable Building a CD Cabinet With MRP MRP Inputs - Authorized MPS From the authorized MPS, we calculate when we need to have replenishment orders of CD ca