mrp and
erp
PRODUCTION AND OPERATIONS MANAGEMENT
Learning Describe MRP
Objectives Determine lot sizes for lot-for-lot, EOQ, and POQ
Describe MRP II
Describe closed-loop MRP
Describe ERP
Chapter Dependent Demand
Dependent Inventory Model Requirements
outline MRP Structure Extensions of MRP
MRP Management MRP in Services
Lot-Sizing Techniques Enterprise Resource Planning (ERP)
Introduction
What is mrp and erp?
Material Requirements Planning (MRP) - a
dependent demand technique that uses a bill of
material (BOM), inventory, expected receipts, and
a master production schedule to determine
material requirements.
Enterprise Resourse Planning (ERP) - An
information system for identifying and planning
the enterprise- wide resources needed to take,
make, ship, and account for customer orders.
means the demand for one item is
DEPendent demand - related to the demand for another
item.
DEPendent effective use of dependent
Inventory model - inventory models requires that the
operations manager know the
requirements following:
1. Master production schedule (what is to be made and when)
2. Specification or bill of material (materials and parts required to make the product)
3. Inventory availability (what is in stock)
4. Purchase orders outstanding (what is on order, also called expected receipts)
5. Lead times (how long it takes to get various components)
Master production A timetable that
specifies what is to be
schedule made (usually finished
goods) and when.
Bills of material A listing of the components,
their description, and the
(BOM) quantity of each required to
make one unit of a product.
Modular Bills
Planning Bills and Phantom Bills
Low-Level Coding
Accurate Good inventory management
is an absolute necessity for an
inventory Records MRP system to work.
purchase Orders When purchase orders are executed,
records of those orders and their
Outstanding scheduled delivery dates must be
available to production personnel.
Lead times for In purchasing systems, the time between
recognition of the need for an order and
components recieving it; in production system, it is
the order, wait, move, queue, setup,
and run times for each component .
MRP procedure is straightforward,
MRP Structure and we can illustrate a small one by hand. A
master production schedule, a bill of material,
inventory and purchase records, and lead times
for each item are the ingredients of a material
requirements planning system.
Gross Material Requirements Plan - A schedule that shows the total demand for an
item (prior to subtraction of on-hand inventory and scheduled receipts) and (1) when it
must be ordered from suppliers, or (2) when production must be started to meets it's
demand by a particular date.
Net Requirements Plan - The result of adjusting gross requirements for inventory on
hand and scheduled receipts.
mrp management
This frequent changes generate what is called system
MRp dynamics nervousness and can create havoc in purchasing and
The inputs to MRP frequently change production department if implemented.
the master schedule
Two tools to reduce MRP system nervousness:
BOM
lead times Time Fences - A means of allowing a segment of the
purchasing master schedule to be designated as "not to be
inventory rescheduled."
Pegging - In material requirements planning systems,
tracing upward the bill of material from the
MRp limitations component to the parent item
MRP does not detailed scheduling -it
plans. MRP is an excellent tool for -
focused and repetitive facilities, but it
has limitations in process (make-to-
order) environments.
Lot-Sizing Techniques
An MRP system is an excellent way to do production planning and determine net
requirements. But net requirements still demand a decision about how much and when
to order. This decision is called a lot-sizing decision.
Lot-sizing decision - The process of, or techniques used in, determining lot size.
Lot-for-Lot - a lot-sizing technique that generates exactly what is required to meet the
plan.
economic order quantity (EOQ)
EOQ is useful when we have relatively constant demand. However, demand may
change every period in MRP systems.
Periodic order Quantity (POQ)
An inventory ordering technique that issues orders on a pretender-mined time
interval, with the order quantity covering the total of the interval's requirements.
Extensions of mrp
Material Requirements planning Ii
A system that allows, with MRP in place, inventory data to be augmented by other resource
variables; in this case MRP becomes material resource planning.
closed-loop MRP
Implies an MRP system that provides feedback to scheduling from the inventory control
system.
Closed-loop MRP system - A system that provides feedback to the capacity plan, master
production schedule, and production plan so planning can be kept valid at all times.
Capacity planning
Load Report - A report showing the resource requirements in a work center for all work
currently assigned there as well as all planned and expected orders.
mrp in services
MRP Services - The demand for many services or service items is classified as dependent
demand when it is directly related to or derived from the demand for other services. Such
services often require product-structure trees, bills of material and labor, and scheduling.
Variations of MRP systems can make a major contribution to operational performance in
such services.
Examples from:
restaurants
hospitals
hotels
Distribution resource planning (drp)
A time-phased stock-replenishment plan for all levels of a distribution network.
Enterprise Resource Planning (ERP)
ERP - An information system for identifying and planning the enterprise- wide resources
needed to take, make, ship, and account for customer orders.
In addition to the traditional components of MRP, ERP systems usually provide financial and
human resource (HR) management information.
ERP systems may also include:
Supply-chain management (SCM)
Customer relationship management (CRM)
Sustainability
erp in service sector
Efficient consumer response (ECR) - Supply chain management systems in the grocery
industry that tie sales to buying, to inventory, to logistics, and to production.
That’s all!
Source: https://sophora.id/wp-content/uploads/2023/08/operations-management-12ed-jay-heizer-pdfdrive-.pdf?
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