Chapter 14: MRP

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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


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