Chapter 14: MRP
MRP
"Material Requirement Planning" a production planning, scheduling, and inventory control system use to manage manufacturing processes
Key benefits of MRP
-better response to customer orders as the result of improved adherence to schedules -faster response to market changes -improved utilization of facilities and labor -reduced inventory levels
Benefits of ERP System
-coherent workflow from one department to another -automation enhances productivity -increase overall performance -provides quality reports and performance analysis -can help integrate the entire supply chain -reduce transaction costs and increase the speed and accuracy of information
how do dependent and independent demand items differ?
-for any product, all components are dependent-demand items; the need for independent items is forecasted; the need for dependent items is calculated
How is MRP related to ERP?
ERP differs from MRP and MRP II in that it incorporates more features than its predecessors. Some ERP packages include supply chain man, customer relationship man, and additional human resources functions such as payroll. ERP systems are architected using client/server or internet framework
Some business functions supported by ERP
Finance HR Supply Chain Customer Relationship Man Sustainability
Bill of Materials
MRP that lists the assemblies, subassemblies, parts and raw materials needed to produce one unit of finished goods
Enterprise Resource Planning (ERP)
a category of business management software -- typically a suite of integrated applications -- that an organization can use to collect, store, manage, and interpret data from many business activities the automation and integration of a company's core business processes such as taking customer orders, scheduling operations, and keeping inventory records and financial data
Gross Material Requirements Planning
a schedule that shows total demand of an item and when it must be ordered from a supplier or when production must be started
Closed-Loop MRP
a system used for production planning and inventory control with an information feedback feature that enables plans to be checked and adjusted
Master Production Schedule (MPS)
a timetable that specifies what is to be made and when. Also gives information on the quantities and required delivery dates for final products
What Functionality does ERP provide to an organization?
allows companies to: -automate and integrate many of their business processes -share a common database and business practices throughout the enterprise -produce information in real time
"Exploding" the bill of materials means
converting the bill of materials into components and raw material requirements
Product Structure Diagram
graphically shows a product and the products that go into it
Limitations of ERP
little customization is possible
MRP II
manufacturing resource planning and builds on MRP by adding shop floor production planning and tracking tools; goes beyond the staging of manufacturing materials
When is demand for a given item said to be dependent?
when there is a clearly identifiable parent
