D08540000120114010Session 8_Production Planning and Control

7/28/2019 D08540000120114010Session 8_Production Planning and Control

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Session 10

Production Planning and ControlMRP explosion for

multi-stage production systems

.

D 0 8 5 4Supply Chain : Manufacturing and Warehousing


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Resource Requirements Planning

Master Production

Scheduling (MPS)

Material RequirementsPlanning (MRP)

Capacity Requirements

Planning (CRP)

Aggregate

Planning

Resource

Requirements

Planning

Adapted from Operations Management by Gaither & Frazier South-Western


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Material Requirements Planning (MRP)



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Materials Requirements Planning (MRP)

Computer based system

Explodes Master Schedule (MPS) into required amounts

of raw materials and subassemblies to support MPS

Nets against current orders and inventories to develop

production and purchased material ordering schedules



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Objectives of MRP

Improve customer service

Reduce inventory investment

Improve plant operating efficiency



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Order Changes

Order

Planning

Report

Elements of MRP

MRP

System

Planned OrderSchedule

InventoryTransaction Data

Bill ofMaterials File

MasterProduction

Schedule

InventoryStatus File

Service-PartsOrders andForecasts

Performance

Exception

Reports

Inputs Outputs



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How MRP Integrates the Manufacturing Function

Exhibit 15.1Copyright 2005 The McGraw-Hill Companies. All rights reserved.


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MRP Begins with number of end items needed

Add service parts not included in MPS

Explode MPS into gross requirements by consulting bill of

materials file Modify gross requirements to get net requirements:

Net Requirements = Gross Requirements

+ Allocated Inventory

+ Safety Stock

- Inventory On Hand Offset orders to allow for lead time



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Outputs of MRP

Planned order schedule - quantity of material to beordered in each time period

Changes to planned orders - modifications to previousplanned orders

Secondary outputs: Exception reports

Performance reports

Planning reports



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Past Due - Burn-Off Plan

0

10

20

30

40

50

6070

80

90

100

Past Due 69 74 68 62 59 57 53 69 67 69 10 13 10 14 8 7 11 12

Target 90 90 90 90 90 90 90 90 80 80 39 39 31 31 31 31 24 24

8/11 8/18 8/25 9/1 9/8 9/15 9/22 9/29 10/6 10/13 10/20 10/27 11/3 11/10 11/17 1 1/24 12/1 12/8


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PAST DUE & FUTURE WORK ORDER LOAD PROFILE

0

50100

150

200

250

300350

400

450

500

550600

CNR

NET LOAD 274 218 55 143 290 0 180 266 275 302 227 417 324 343 359 467 327 455 393 307

10 WEEK OUTPUT A VG. 306 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288

12/1 PD 12/8 12/15 12/22 12/29 1/5 1/12 1/19 1/26 2/2 2/9 2/16 2/23 3/1 3/8 3/15 3/22 3/29 4/5


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LATE TO START W/OS

0

100

200

300

400

500

600

700

800

7/7 8/4 9/1 9/8 9/15 9/22 9/29 10/6 10/13 10/20 10/27 11/3 11/10 11/17 11/24 12/1 12/8 12/15 12/22

#ofW/O's

0

20

40

60

80

100

%o

fW/O'sLatetoStart

Workable 192 187 76 94 117 101 105 153 197 127 123 137 73 29 52 46 35

Short Self 62 101 85 109 107 108 112 127 179 24 51 47 35 31 50 45 25

ME Ho ld /Late Engr 21 46 22 24 17 16 17 16 7 8 4 2 4 7 13 2 14

Short RAWMA 1 1 1 0 0 0 0 0 0 1 1 1 1 1 1 1 1

Short Indirects 33 93 69 94 92 80 70 72 105 30 44 42 29 38 37 23 29

Short P urchased 185 294 233 291 274 305 363 396 317 310 214 170 176 216 144 183 155

% Late To Start 48 54 52 55 52 54 54 58 55 62 58 58 53 52 60 55 52

7/7 8/4 9/1 9/8 9/15 9/22 9/29 10/6 10/13 10/20 10/27 11/3 11/10 11/17 11/24 12/1 12/8 12/15 12/22

W/Os Past Start Date = 500

Late to Start = 259 (52%)


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Indirects Owed from Others

Purchased

127 127

122

134 132 128

107

131 130

173

99

127 128

150

90 89

103

81

0

20

40

60

80

100

120140

160

180

200

8/11 8/18 8/25 9/1 9/8 9/15 9/22 9/29 10/6 10/13 10/20 10/27 11/3 11/10 11/17 11/24 12/1 12/8

Act.Other Grps. 34 34 40 49 50 47 40 35 35 47 27 29 32 37 25 25 31 29

Act.Group 2 93 93 82 85 82 81 67 96 95 126 72 98 96 113 65 64 72 52

Total 127 127 122 134 132 128 107 131 130 173 99 127 128 150 90 89 103 81

Burn Off Plan 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70

8 /11 8 /18 8 /2 5 9 /1 9 /8 9 /15 9 /2 2 9 /2 9 10 /6 10 /13 10 /2 0 1 0/ 27 11/ 3 11/ 10 11/ 17 11/ 24 12 /1 12 /8

59

45 45

41

4951

55

45

37 38

31

17

25

2119 19

1614

0

10

20

30

40

50

60

70

MTC 1 1 1 0 1 1 1 0 0 1 1 1 1 1 1 1 0 0

Fab Ctr 36 29 29 27 37 35 37 31 27 28 22 13 15 13 13 14 10 8

DMC18 12 12 10 8 12 16 12 8 6 7 3 6 6 4 4 6 6

Subs 4 3 3 4 3 3 1 2 2 3 1 3 1 1 0 0 0

Total 59 45 45 41 49 51 55 45 37 38 31 17 25 21 19 19 16 14

8 /4 8 /1 1 8 /1 8 8 /2 5 9 /1 9 /8 9 /1 5 9 /2 2 9 /2 9 1 0/ 6 1 0 /1 3 10 /2 0 10 /2 7 1 1 /3 1 1 /1 0 11 /1 7 11 /2 4 1 -D ec

Shop


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Lot-Sizing in MRP

Lot-size is the quantity ordered/produced at one time

Large lots are preferred because:

Changeovers cost less and capacity greater

Annual cost of purchase orders less Price breaks and transportation breaks can be utilized

Small lots are preferred because:

Lower inventory carrying cost

Reduced risk of obsolescence

Shorter cycle time to produce customer order



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The best method, resulting in least cost,

depends on cost and demand patterns.

Lot-Sizing Methods

Economic Order Quantity (EOQ) does not consider quantity discounts

does not always provide the most economical approach withlumpy demand

Lot-for-Lot (LFL)

accommodates lumpy demand

Period Order Quantity (POQ)



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Issues in MRP Lot-Sizing

Useful at lower levels but may drive excess inventory when applied athigher levels

Net Change versus Regenerative MRP

Net change may generate too many action notices

Regenerative more costly to run but appears to be easier to manage

Assemble-to-Order Firms

MPS and MRP treated separately from Final Assembly Schedule(FAS)

Use Modular Bill of Material



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MRP I to MRP II

MRP I simply exploded demand (MPS) into required materials

MRP II became Manufacturing Resource Planning which provides a

closed-loop business management system

Financial management

Shop floor control

Operations management

Simulation capability

Adapted from Operations Management by Gaither & Frazier

South-Western


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Evaluation of MRP

Most beneficial to process-focused systems that have

long processing times and complex multistage

production steps

Lead times must be reliable

Must freeze MPS for some time before actual

production... certain demand

Difficult to implement


South-Western


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Where MRP Can Be Used

Industries with a job-shop environment in which a number of

products are made in batches using the same production

equipment.

Companies involved in assembly operations and least valuable to

those in fabrication.

Firms with products that have a large number of levels in the product

in terms of subassemblies and components.

Copyright 2005 The McGraw-Hill Companies. All rights reserved.


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Capacity Requirements Planning (CRP)


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Capacity Requirements Planning (CRP)

Tests MPS for feasibility

Utilizes routings to determine labor/machine loads

If schedule feasible, recommends freezing

If schedule overloads resources, points out processesthat are overscheduled


South-Western


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Load Schedules

Compares actual labor and machine hours againstavailable hours

Offsets schedules between successive stages ofproduction by lead times

Provides feasible MPS and economically loaded workcenters

Promotes system operating efficiency ... lowers costs!


South-Western

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D08540000120114010Session 8_Production Planning and Control