Agenda
TPPE37 Manufacturing Control
• Material Requirements Planning (MRP)
• MRP Logic and Product Structure Trees
• MRP input and output
Lecture 3
Material requirements planning
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The Planning Hierarchy
Master planning
Sales and operations planning
Production
Resource
planning
planning
Demand
management
Master (production) scheduling
Final assembly
schedule
Master prod.
schedule
Material
planning
Feedback
Vendor
systems
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A simple example
Front
end
Rough-cut
capacity plan
Given
Giventhe
theproduct
productstructure
structuretree
treefor
for“A”
“A”and
andthe
thelead
leadtime
timeand
anddemand
demand
information,
provide
a
materials
requirements
plan
that
defines
information, provide a materials requirements plan that definesthe
the
number
numberof
ofunits
unitsof
ofeach
eachcomponent
componentand
andwhen
whenthey
theywill
willbe
beneeded
needed
Product Structure Tree for Assembly A
A
Detailed capacity
Engine
planning
Shop floor
systems
Back
end
3
B(4)
D(2)
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C(2)
E(1)
D(3)
F(2)
Lead Times
A
1 day
B
2 days
C
1 day
D
3 days
E
4 days
F
1 day
Total Unit Demand
Day 10 50 A
Day 8
20 B (Spares)
Day 6
15 D (Spares)
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A simple example (cont.)
A simple example (cont.)
First,
First, production
production of
of “A”
“A” are
are scheduled
scheduled backwards
backwards to
to
allow
for
their
lead
time.
allow for their lead time.
A
B
Day:
A Required
Order Placem ent
1
2
3
4
5
6
7
8
9
Day :
R e q u ire d
O rd e r P la c e m e n t
R e q u ire d
O rd e r P la c e m e n t
3
4
5
6
20
6
7
8
9
20
50
200
10
50
200
Spares
4x50=200
B(4)
C(2)
E(1)
D(3)
F(2)
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A simple example (cont.)
2
5
LT = 2
D(2)
1
4
A
5
Day:
Required
Order Placem ent
Required
Order Placem ent
Required
Order Placem ent
Required
Order Placem ent
Required
Order Placem ent
Required
Order Placem ent
3
20
50
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2
10
50
LT = 1 day
A
LT=1
B
LT=2
C
LT=1
D
LT=3
E
LT=4
F
LT=1
1
6
Remark
7
8
9
20
50
200
200
10
50
Material and productin plan are explored through product structure tree
100
55
20
400
55
400
20
200
100
300
300
200
200
200
A
Part D: Day 6
B(4)
D(2)
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C(2)
E(1) D(3)
F(2)
40 + 15 spares
7
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Material requirements planning
Additional MRP Scheduling Terminology
• Gross Requirements
• Scheduled receipts
••
••
••
••
DDAA==100,
100,50,
50,30,
30,150,
150,100
100
No
Nosafety
safetystock
stock
Initial
Initialstock
stock==100,
100,700,
700,110
110
Lot
Lotsizing:
sizing:
LFL,
LFL,FOQ=900,
FOQ=900,FOQ=200
FOQ=200
•• Lead
time:
1,
1,
2
Lead time: 1, 1, 2periods
periods
•• Sch.
Sch.receipts:
receipts:200
200of
ofCCper.
per.22
• Projected available balance
• Net requirements
• Planned order receipt
• Planned order release
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Period
Gross requirements
Scheduled receipts
Inventory position
Net requirements
Planned order receipts
Projected available balance
Planned order releases
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Lead time:1 period
Buffer: Lot sizing:LFL
1
2
3
100
50
30
4
150
1
2
bill of material
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The MPS as gross requirements
Large MRP matrix
Item no: C
Description:
Level
0
5
100
6
7
Item no:
Period
M aster Production Planning (M PS)
D escription: C
1
2
Item no:
Description: C
Lead time: 1 period
Buffer:
Lot sizing: LFL
1
2
3
Period
Gross requirements
Scheduled receipts
Inventory position
Net requirements
Net. req. consid. plan. orders
Planned order receipts
Projected available balance
Planned order releases
8
3
4
5
6
0
0
100
0
50
-50
50
50
0
80
-80
80
80
0
230
-230 -330
230 330
230 330
0
0
330
4
5
Period
Gross requirements
Scheduled receipts
Inventory position
Net requirements
Net. req. consid. plan. orders
Planned order receipts
Projected available balance
Planned order releases
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Lead time: 2 periods
Buffer:
Lot sizing: LFL
1
2
3
4
5
6
7
6
7
8
0
×3
×2
Item no:
Description:B
8
Lowlevel
Item no:
Description: C
100
7
Period
Gross requirements
Scheduled receipts
Inventory position
Net requirements
Net. req. consid. plan. orders
Planned order receipts
Projected available balance
Planned order releases
Lead time: 1 period
Buffer:
Lot sizing: LFL
1
2
3
4
5
6
7
8
1
8
×1
2
12
14
MRP input and output
Different types of orders
Item no:
Description:
Released orders
Planned orders
Firm pl. orders
Period
Gross requirements
Scheduled receipts
Inventory position
Net requirements
Net req. consid. planned orders
Planned order receipts
Projected available balance
Planned order releases
Lead time:
Buffer:
Lot sizing:
1
2
© Ou Tang
Engineering
design
changes
3
4
5
Master production
Schedule (MPS)
Material
planning
(MRP
computer
program)
Bill of
material
file
Primary reports
Planned order schedule
for inventory and
production control
13
Inventory
transactions
Inventory
record file
Secondary reports
Exception reports
Planning reports
Reports for performance
control
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©The McGraw-Hill Companies, Inc., 2004
Primary MRP reports
Secondary MRP Reports
•
•
•
•
Planned orders to be released at a future time
Order release notices to execute the planned orders
Changes in due dates of open orders due to rescheduling
Cancellations or suspensions of open orders due to
cancellation or suspension of orders on the master
production schedule
• Inventory status data
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• Planning reports, for example, forecasting inventory
requirements over a period of time
• Performance reports used to determine agreement between
actual and programmed usage and costs
• Exception reports used to point out serious discrepancies,
such as late or overdue orders
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Lot sizing
Design of the MRP-system
•• Planning
Planninghorizon
horizon
–– Normally
Normallythe
thesame
sameas
asininthe
theMPS
MPS
(cum.
(cum.lead
leadtime
time++visibility)
visibility)
Objectove
Objectove: :balance
balancesetup
setup(ordering)
(ordering)cost
costand
andinventory
inventoryholding
holdingcost
cost
•• LFL
=
Lot
For
Lot
LFL = Lot For Lot
•• FOQ
FOQ==Fixed
Fixedorder
orderquantity
quantity
•• POQ
POQ==Periodic
Periodicorder
orderquantity
quantity
•• Planning
Planningperiod
period
––
––
Week
Week
Bucketless
Bucketless
•• Processing
Processingfrequency
frequency
––
––
••
••
Regeneration
Regeneration
Net
NetChange
Change
Lot
Lotsizing
sizingtechnique
technique
Buffering
Buffering
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Buffering techniques
Effects of Lot sizing
•• Safety
Safetystock
stock
•• Lot-for-lot
Lot-for-lot
––
––
––
++”Preserves”
”Preserves”the
theMPS
MPSquantities
quantities
++Suitable
for
JIT
manufacturing
Suitable for JIT manufacturing
++Generates
Generatessmooth
smoothrequirements
requirementsfor
formaterial
materialand
andcapacity
capacity
––No
economic
considerations
No economic considerations
Physical
Physicalsafety
safetyquantity
quantity
Used
when
Used whenquantity,
quantity,demand
demandor
orconsumption
consumptionisisunreliable
unreliable
Net
req.
generated
when
safety
stock
Net req. generated when safety stockisisused
used(rec.
(rec.by
byAPICS)
APICS)
•• Safety
Safetylead
leadtime
time
•• Fixed
Fixedorder
orderquantities
quantities
––
––
––
––Lumps
Lumpstogether
togetherrequirements
requirementstotolarge
largeorders
orders
––Amplifies
Amplifieslumpiness
lumpinessthrough
throughthe
theBOM
BOM
––Fluctuationg
Fluctuationgmaterial
materialand
andcapacity
capacityrequirements
requirements
Safety
Safetyinintime,
time,order
orderreceipt
receiptbefor
beforrequirement
requirement
Used
when
lead
times
are
stochastic
Used when lead times are stochastic
Extends
Extendsthe
thelead
leadtime
time
•• Periodic
Periodicorder
orderquantity
quantity
++Economic
Economicconsiderations
considerationsconsidering
consideringdiscrete
discreterequirements
requirements
––Estimation
Estimationof
ofcost
costparameters
parameters
––Covering
Coveringmany
manyperiods
periodsnet
netrequirements
requirementstends
tendstotocreate
create
amplified
amplifiedvariability
variabilityof
ofdemand
demandfor
formaterial
materialand
andcapacity
capacity
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Ex: Buffering techniques - SS
Item no:
Description: A
Period
Gross requirements
Scheduled receipts
Inventory position
Net requirements
Planned order receipts
Projected available balance
Planned order releases
Lead time: 2 periods
Buffer: 30 pcs
Lot sizing: FOQ=100
1
2
3
4
50
55
55
45
100
85
35
80
25
–20
5
45
Ex: Buffering techniques - SL
Item no:
Description: A
5
45
–65
45
6
55
Period
Gross requirements
Scheduled receipts
Inventory position
Net requirements
Planned order receipts
Projected available balance
Planned order releases
7
30
–120 –150
55
30
85
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5
45
–65
55
6
55
7
30
–120 –150
30
85
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Processing frequency
Nervousness
”Significant
”Significantchanges
changesin
inMRP
MRPplans,
plans,which
whichoccur
occureven
evenwith
with
only
onlyminor
minorchanges
changesin
inhigher-level
higher-levelMRP
MRPrecords
records
or
orthe
themaster
masterproduction
productionschedule.”
schedule.”
•• Regeneration
Regeneration
–– Complete
Completerecalculation
recalculationof
ofall
all
requirements
requirements
•• Net
Net change
change
•• Actions
Actionsfor
forreducing
reducingnervousness
nervousness
–– Replanning
Replanningof
ofmaterial
materialrequirements
requirements
only
for
items
affected
only for items affectedby
bychanges
changes
© Ou Tang
Lead time: 2 periods
Buffer: 1 period
Lot sizing: FOQ=100
1
2
3
4
50
55
55
45
100
85
35
80
25
–20
20
45
––
––
––
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© Ou Tang
Stabilizing
Stabilizingthe
theMPS
MPSwith
withtime
timefences
fences
Lot
size
carefully
Lot size carefully
Use
UseFPO
FPOininMPS
MPSand
andMRP
MRP
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