2. MRP
OBJECTIVES
INPUTS AND OUTPUTS
BENEFITS
DRAWBACKS
MRP-II
INTRODUCTION
STRUCTURE
BENEFITS
DRAWBACKS
JIT MANUFACTURING
AIMS
TYPES OF WASTE
BUILDING BLOCKS
KANBAN SYSTEM
CASE STUDIES
CONTENTS
3. MRP stands for Material requirement planning.
Basic definition:
It is a planning technique which converts master
production schedule of end products into detailed
schedule for raw materials and parts used in those
end products.
MRP is a means for determining the number of parts,
components, and materials needed to produce a
product
MRP
4. Inventory reduction:
Determines how many components are needed and when in
order to meet MASTER PRODUCTION SCHEDULE.
Reduction in production and delivery lead times.
It helps to meet delivery deadlines by coordinating inventories,
procurement and production decision
Realistic commitments
Improves customer satisfaction.
OBJECTIVES OF MRP
5. Independent demand:
Demand for the product is not directly related to demand for
other items
Is the demand for finished product.
It needs to be forecasted.
Dependent demands:
Demand for the product is directly related to demand for some
other product.
Is the demand derived from finished product.
Components required for finished product.
FUNDAMENTAL CONCEPTS OF MRP
7. Based on actual customer orders and predicted demand.
Indicates when each ordered item will be produced in coming
weeks, and in how much quantity.
It is a plan specifying timing and quantity of production for
each end item.
MPS inputs come from sales and marketing .
MASTER PRODUCTION SCHEDULE(MPS)
9. A listing of all of the raw materials, parts, subassemblies, and
assemblies needed to produce one unit of a product .
BOM Shows way a finished product or parent item is put
together from individual components.
Parent item shown at highest level or level zero , Parts that go
into parent item are called level 1 components and so on.
BILL OF MATERIALS (BOM)
12. Detailed information regarding the quantity of each item,
available in hand, on order to be released, for use in various time
periods.
MRP system using inventory master file is used to determine the
quantity of material available for use in a given period.
If sufficient items not available , the system includes the item on
the planned order release report.
INVENTORY STATUS FILE
14. Primary reports
1. Work orders / Planned orders - schedule indicating the
amount and timing of future orders.
2. Order Release - Authorization for the execution of planned
orders.
3. Action Notices or Rescheduling Notices - which orders are
to be released, revised and canceled during the current time
period.
MRP OUTPUTS
15. Secondary Reports
1. Performance control Reports – evaluate system operations .
They aid in measuring deviations from plans, and also provide
information to assess cost performance.
2. Planning Reports – are useful to forecast future inventory
requirements.
3. Exception Reports – these help to find the major
discrepancies such as late and overdue orders, excessive scrap
rates, reporting errors, etc.
MRP OUTPUTS
16. Keep inventory levels to a minimum.
Keeps track of inventory that is used.
Tracks the amount of material that is required.
Set safety stock levels for emergencies.
Set up production times among the separate manufacturing
stages.
Plan for future needs of raw materials or components.
BENEFITS
17. Inaccurate information can result in mis-planning , overstock,
under-stock, or lack of appropriate resources.
The inaccurate master schedule will provide wrong lengths of
time for production . Hence affecting planning.
MRP systems can be costly and time-consuming to set up
DRAWBACKS
19. Manufacturing resource planning (MRPII) is defined as a
method for the effective planning of all resources of a
manufacturing company.
. MRP II serves as an extension of MRP(closed loop
manufacturing resource planning, also abbreviated as
CLMRP).
MANUFACTURING RESOURCE PLANNING
21. More efficient use of resources
Reduced inventories
Less idle time
Fewer bottlenecks
Better priority planning
Quicker production starts
Schedule flexibility
BENEFITS
22. Improved customer service
Meet delivery dates
Improved quality
Lower price possibility
Improved employee moral
Better management information
23. Error Due To Poor OR incorrect Information
Can be used only manufacturing operations of firm.
DRAWBACKS
29. OVERPRODUCTION
Manufacturing an item before it is needed.
INAPPROPRIATE PROCESIING
Using expensive high precision equipment when simpler
machines would suffice.
WAITING (WIP):
Wasteful time incurred when product is not being
moved or processed.
TRANSPORTATION
Excessive movement and material handling of product
between processes.
EIGHT TYPE OF WASTE
30. MOTION:
Unnecessary effort related to the ergonomics of reaching,
lifting, and walking.
INVENTORY:
Excess inventory hides problems on the shop floor, consumes
space, increases lead times, and inhibits communication.
DEFECTS:
Quality defects result in rework and scrap, and add wasteful
costs to the system in the form of lost capacity, rescheduling
effort, increased inspection, and loss of customer good will.
UNDERUTILISATION OF EMPLOYEES
Failure of the firm to learn from and capitalize on its
employees’ knowledge and creativity impedes long term efforts to
eliminate waste.
32. PRODUCT DESIGN:
Standard parts
Design simplification
PROCESS DESIGN
Setup time reduction
Limited WIP
Reduced inventory storage
PERSONNEL
Worker motivation
Trained workers
MANUFACTURING PLANNING AND CONTROL
Pull systems
Close vendor relationship
BUILDING BLOCKS OF JIT
33. JIT IS based on pull type production control.
Toyota uses kanban pull system.
Kanban means signal card.
A kanban is a visual signal that lets workers know that a supply of a
material needs to be replenished.
There are two types
production kanban: it authorizes upstream station to produce
parts.
transportation kanban: authorizes transportation of container of
parts to station
PULL TYPE SYSTEM
34. KANBAN SYSTEM
Storage
Part A
Storage
Part AMachine
Center
Assembly
Line
Material Flow
Card (signal) Flow
Once the Production kanban is received, the Machine Center produces a unit to replace
the one taken by the Assembly Line people in the first place.
The process begins by the Assembly Line people pulling Part A from
Storage
Production kanban
38. Danger of disrupted production due to non-arrival of supplies.
Danger of loss sales.
High dependence on suppliers.
Less time for quality control on arrival of materials.
Increased ordering and admin costs.
May lose bulk-buying discounts.
DISADVANTAGES
40. McDonald’s was opened in 1955.
It was originally known for their hamburgers.
Their business boomed during 1960 to 1980, during that
period more than 1000 restraunts were opened on franchise
basis.
1/4th of the breakfast in usa came from McDonalds.
During mid 1990 they had opened 23,000 restraunts.
MCDONALDS
41. During 1990’s, as people wanted more variety of burgers,
their old system of preparing food collapsed.
They needed to make variety of burgers and fast.
The new JUST IN TIME system ‘Made For you’ was applied to
their restraunts.
This changeover costed 25000$ per restraunt. Half of which
McD was ready to pay.
NEED FOR JIT IN MCDONALD'S
42. JIT system wherein McDonald's doesn't begin to cook its
orders until a customer has placed a specific order.
Sophisticated burger-making technology (including a record-
breaking bun toaster)
McDonald's is able to make food fast enough to wait until it's
been ordered.
Reduction in wastage.
IMPLEMENTATION OF JIT
43. Improved Quality – The burgers are prepared freshly and
hence the quality has improved.
Customer service – As the burger is made only after the
order is placed, making special orders is not an issue.
Cost Reduction – Due to significant reduction in wastage as
uncooked material has a higher shelf life.
Reduction in waiting – Customer’s waiting time reduce 11
min. to just 1 and half min.
BENEFITS OF JIT