MRP II+ +Chapter+4

8/8/2019 MRP II+ +Chapter+4

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By:-

Gaurav Goyal

Assistant Prof,LMTSOM

MRP-II

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MRP Works Best When...

End Products are Standardized

Batch Production

End product is moderately complex and isassembled from a set of components andraw materials

E.g automobiles, food processing and

electronics items

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Limitations of MRP

only looks at materials, ignores capacity,shop floor conditions

requires user discipline

requires accurate information/datarequires valid MPS

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WHAT IS MRP II??An information system that integrates all

manufacturing and related applications includingdecision support, material requirement planning(MRP), accounting and distribution. Def given by APICS (Advancing Productivity,Innovation and Competitive Success)

It is used to determine all resources of themanufacturing company related to manufacturing andnot only material requirement.

Has a simulation capability to answer "what-if"questions.

It is a total company management concept for usinghuman resources more productively.

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Expanded MRP with emphasis placedon integration

Financial planning

Marketing

Engineering

Purchasing

Manufacturing

MRP II

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DIFFERENCE BETWEEN MRP,MRP II AND ERPMRP is simply about ensuring the materials are

available to manufacture a specific part in aspecific volume

MRP II takes care of all other aspects of a job

including ordering, tracking inventory andensuring capacity.

ERP is an integrated information system thatserves all the departments within an enterprise.

ERP provides an integral coordination of theactivities that are carried out in all thedepartments of the enterprise.

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just because MRP says

produce X, are we able toproduce X?

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Capacity Requirements

PlanningNo..Need to evaluate the capacity to see if it can meet

planNeed all of MRP information plus:

1. How much capacity a process requires to make 1unit of a product

2. When does the process need the hours (time) ofcapacity

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CAPACITY REQUIREMENTPLANNING

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MarketMarket

DemandDemand

ProductionProductionplanplan

Problems?Problems?

Rough-cutRough-cut

capacity planningcapacity planning

YesYes NoNo YesYesNoNo

FinanceFinance

MarketingMarketing

ManufacturingManufacturing

AdjustAdjustproduction planproduction plan

MasterMaster

productionproduction

scheduleschedule

MRPMRP

CapacityCapacity

planningplanning

Problems?Problems?RequirementsRequirements

schedulesschedules

Adju

stmast e

rsc

hedule

Adju

stmast e

rsc

hedule

MRP IIFigure 13.14

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Capacity Planning

Develop a tentativemaster production

schedule

Develop a tentativemaster production

schedule

Use MRP tosimulate material

requirements

Use MRP tosimulate material

requirements

Convert material

requirements toresource requirements

Firm up a portionof the MPS

Is shopcapacity

adequate?

Cancapacity be

changed to meet

requirements

Revise tentative

master productionschedule

Changecapacity

Yes

No

Yes

No

Figure 13.15

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Defining CapacityCapacity is the amount of work that can

be done in a period of time

It is usually stated in standard hours ofwork

It must be determined at plant,department, and work center levels.

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Capacity Planning ProcessDetermine the capacity available

Translate the released and planned

orders into capacity requiredSum up capacities required for each

work center

Resolve differences between availablecapacity and required capacity

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Determining Capacity

AvailableCapacity available is the capability of a

system or resource to produce a

quantity of output in a particular timeperiod.

Available (theoretical) capacity can becalculated or measured

To calculate available capacity, oneneeds to knowAvailable timeUtilizationEfficiency

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Capacity MeasurementsTheoretical capacityvolume of activity that could be attained

under ideal operating conditions, with

minimum allowance for inefficiency. It isthe largest volume of output possible;also called maximum capacity.

Demonstrated capacityhighest activity level at which the

factory can operate with an acceptabledegree of efficiency, taking intoconsideration unavoidable losses ofproductive time (i.e., vacations, holidays,repairs to equipment) 12/01/1015


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End of Session 10

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Utilization and Efficiency

Actual Hours Charged

Utilization =Scheduled Available Hours

Standard Hours Earned

Efficiency = Actual Hours Charged

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Rated Capacity = Available time x Utilization xEfficiency

Rated or Actual Capacity

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CAPACITY REQUIREMENTPLANNINGThe technique that allows business to plan ahead to

determine how large their future inventory capacityneeds to be in order to meet demand.

Key elements of the CRP process areEstablishing

Measuring

adjusting the levels of the production capacity basedon the process of determining the amount of labor

and machine resources required to accomplish thetasks of production

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CAPACITYCapacity Lead Strategy

It is done in anticipation of demand and thecapacity is increased.

It is a very aggressive strategy and is used tolure customers away from competitors.

Capacity Lag StrategyIt is done after demand has increased and the

capacity is then increased.

It is a conservative strategy and may result inloss of customers.

It assumes that customers will return aftercapacity has been met which might not be true.

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STRATEGIES FOR TIMINGCAPACITYAverage Capacity StrategyHere average expected demand is calculated

and then capacity is increased accordingly.

It is a moderate strategy.

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Capacity Planning

Load reports:Department or workcenter reports that compare knownand expected future capacityrequirements with projectedcapacity availability.

Time fences: Series of time intervalsduring which order changes are

allowed or restricted.

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Rough Cut Capacity Planning

Approximate calculation of the capacityrequired at critical work centers to meet thedemand in order to check the feasibility of aMaster Production Schedule.

When the capacity required exceeds thecapacity available the MPS must be adjustedbefore proceeding to the MRP.


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Lead-Time ElementsQueuetime waiting before operation begins

Setup

time getting ready for operation

Run time performing operation

Wait time waiting after operation ends

Move

time physically moving between operations

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Adjustments to Capacity orLoad Increasing CapacityAdd extra shifts

Schedule overtime or weekends

Add equipment and/or personnel

Reducing Load

Subcontract work to outside suppliers Reduce lot sizes

Hold work in production control

Reduce the MPS

Reducing Capacity

Eliminate shifts or reduce length of shifts worked Reassign personnel temporarily

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Continued Increasing Load Make items normally purchased or subcontracted

Release orders early

Increase lot sizes

Increase the MPS

Redistributing the Load Use alternate work centers

Use alternate routings

Adjust operation start dates forward or backward in time

Revise the MPS

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Load Sources

Open OrdersMRP - Planned Order Releases

Other SourcesReworkExcess scrapQuality problems

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Routing Data

Operation identification codeOperation description

Planned work center

Standard setup timeStandard run time per unit

Tooling requirements

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CRP ILLUSTRATION

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http://crp%20illustration.ppt/http://crp%20illustration.ppt/


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MGT 651 - IV DR. OZATALAY31

Scheduling

ObjectivesMeet delivery datesEffectively use manufacturing resources

InvolvesEstablishing start and finish dates for each

operation needed to complete an order

S h d li d L di


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Scheduling and LoadingTechniquesForward scheduling:Activity starts as soon as the order is received

.regardless of due date

Backward scheduling

Activities are scheduled back from the due dateInfinite loadingAssumes capacity is infinite at any work center

Finite loading

Assumes there is a definite limit to capacity at anywork center


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Bottlenecks ManagementBottlenecks control the throughput of all

products processed by them

Work centers feeding bottlenecks should bescheduled at the rate the bottlenecks can

processA time buffer inventory should be established

before the bottleneck

Work centers fed by the bottleneck have their

throughput controlled by the bottleneck


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Input, Output, Queue, and Capacity

Queue

Capacity

Input Input Input


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Actual Output Less Than Planned Output

Queue

Capacity

Input Input Input

Not enough input?

Queues and lead

times increase

Insufficient Capacity?


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Actual Input Less Than Planned Output

Queue

Capacity

Input Input Input

Feeding work centers

behind schedule

Work released late

Late ordersMay run out of work


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Actual Output Greater Than Planned Output

Queue

Capacity

Input Input Input

May run out of work

Excess Capacity


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MGT 651 IV DR OZATALAY38

Actual Input Greater Than Planned Input

Queue

Capacity

Input Input Input

Feeding work centers

ahead of schedule

Work released early

Queues and lead times

will increase

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MRP II+ +Chapter+4