DRP-MRP by raikwarvaibhav

VIEWS: 37 PAGES: 24

									   MRP [Materials Requirement Plan]
      Popular concept in 1960&1970
     Consists of a computer system & a
      manufacturing information system
Does production scheduling and materials plan
               MRP system
 MRP systems compute net requirements for
  each inventory item, time-phase them, and
       determine their proper coverage

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                      MAJOR ASSEMBLY




               SUB
               ASSEMBLY II
               SUB                        SUB
            ASSEMBLY I                 ASSEMBLY II




A1 A2 B1      C1 C2 C3 D1 D2   A3 A4 C4 D3 D4        C5 B2 A5 D5


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                  Objectives
Ensure the availability of materials -components
and products for planned production and customer
                     delivery
   Maintain the lowest possible inventory level
Plan manufacturing activities, delivery schedules
            and purchasing activities
                    Process
      MRP starts with, customer’s demand
 [independent demand] and explodes the time and
need for components based on the demand for end
                     product
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    Scope: MRP System focuses on inbound
                  logistical area
        Key elements of MRP system
         Master Production Schedule
               Bill of Materials
             Inventory Status Files
                MRP Program
              Outputs & Reports
                Development
      First phase is called MRPI[Materials
 Requirement Planning] and the second phase is
called MRPII[Manufacturing Resources Planning]
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  MRP I is a computer based production and
inventory control system [soft ware] that attempts
   to minimize inventories while maintaining
   adequate materials for production process.




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                      Customers
                      orders                Forecast
inventory                                                   Engineering
                                           s                changes
transactions


                            Master
                            production
                            schedule
                            [which product to
                            produce, in what
   Inventory                                           Bill of
                            quantity & when]
   status file                                         materials file
   [finished items,                                    [product
   WIP, planned                                        structure and
   orders                                              routing]
                                  MRP I
                                  SYSTEM




                        PLANNED SCHEDULES
                        AND VARIOUS OTHER
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                        REPORTS                                         6
        When does it get applied?
 The process follows an intermittent system
           Demand is dependent
Purchasing dept., their suppliers and company’s
own manufacturing system is flexible enough to
      handle deliveries on weekly basis
          Advantages of MRP I
   Improved business results[ROI, profits]
      Improved manufacturing results
       Better manufacturing control
              Less inventory

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            Time phased ordering of materials
              Less materials obsolescence
                   Higher reliability
     More responsiveness to market demand
               Reduced production costs
               Disadvantages of MRP I
    Due to small lot purchases high material
    acquisition costs and high ordering costs
    Stock out costs are more as safety stock
               protection is low
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 A limitation of software as adapting to specific
  situations is difficult. So modification of the
               software is necessary
                      MRP II
    MRP I is updated and expanded to include
  financial and marketing and logistics elements.
MRP II includes entire set of activities involved in
 planning and control of production.It consists of a
   variety of functions like production planning,
resource requirements planning, master production
 scheduling, materials requirement planning[MRP
       I], shop floor control and purchasing
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      MRP II


       Orders                  Bill of materials     Inventory
       [production plan]                             records


                           Material requirement
                           planning [MRP]


                           Capacity requirement
                           planning [CRP]

               No
                                  Realistic?

                                               yes
                            Execute capacity
                            plans

                            Execute materials plan

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            Benefits of MRP II
Inventory reductions of one fourth to one third
         Higher inventory turn over
 Improved consistency in on-time customer
                   delivery
Reduction in purchasing costs due to less urgent
                  purchases
    Minimization of workforce overtime




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       DRP is a technique of Distribution
                    Management
DRP concept has evolved in two phases, DRPI
 (Distribution Requirement Planning) & DRP II
         (Distribution Resources Planning)
 DRP I deals with inventory planning whereas
       DRP II covers all resources relevant to
distribution - warehouse space, man power levels,
    transport capacity [eg. trucks, rail cars] and
                   financial flows

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                      DRP I
        Applicable to outbound logistics
 Determination of inventory requirement at
 points of consumption for short spans of time
  Plan to move inventory in the distribution
         channel in response to the above
 It is a time phased plan, dynamic and flexible
                     in nature
Customer dependent planning, depends on the
          changing market environment
           Not organization dependent

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Coordination responsibility once the finished
             goods are produced
Planning is realistic as it is closer to real time
     Overall inventory levels are low
Response time to real time market requirement
                     is low




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                      DRP II
 Distribution Resource Planning [DRP II ]is an
               extension of DRP I
DRP II applies the time phased logic of DRP I to
     replenish inventories in multi echelon
              warehousing systems
DRP II extends DRP I to include the planning of
  key resources in a distribution system –ware
house space, man power levels, transport capacity
    [eg. trucks, rail cars] and financial flows


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  As an extension of DRP I, DRP II uses the
needs of distribution to drive the master schedule,
        controlling the materials planning
                 DRP PROCESS
       Planning tool for DRP is schedule
  Schedule for each SKU at each distribution
    facility on daily, weekly or monthly basis
 Integration of the above schedules and overall
requirement planning for the regional warehouse
             and central supply facility


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             Marketing benefits
   Increased service levels - improved OTD,
        reduced Customer Complaints
   Effective new product introduction plans
       Ability to anticipate shortages
      Improved inventory coordination
              Logistics benefits
         Reduced distribution costs
          Reduced inventory levels
  Decreased warehouse space requirement as
            inventory levels are low
              Lesser back orders
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Improved inventory visibility & co-ord. between
         manufacturing and logistics
                Constraints
          Needs accurate forecast
       Sources of errors in the system
       Inaccuracy in forecast quantity
       Inaccuracy in forecast location
        Inaccuracy in forecast time
        Variable performance cycles
  System nervousness-frequent rescheduling
              causing confusion
            Uncertainty buffers
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       How does a DRP system work?
  Consider a distribution net work with three
 distribution centers catering to the needs of the
                       market
One central facility that supplies inventory to
             three distribution centers
 Central facility is supplied by the production
           facility planned as per MRP
DRP modifies the MRP to the advantage of the
                    organization

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 DRP & MRP LINK
 DISTRIBUTION CENTER I
 LEAD TIME IS 2 WEEKS, SAFETY STOCK IS 55, ORDER QUANTITY
 500
     WEEKS
DETAILS          0     1     2     3     4     5     6     7     8

WEEKLY           -     50    50    60    70    80    70    60    50
REQ

STOCK            352   302   252   192   122   542   472   412   362

WHEN &                             500         500
HOW
MUCH?

                                         Arrival From
            Order to                     Central Supply Facility
            Central Supply Facility
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  DISTRIBUTION CENTER II
  LEAD TIME IS 2 WEEKS, SAFETY STOCK IS 40, ORDER QUANTITY 150
  WEEKS
DETAILS         0     1     2    3     4       5     6     7     8


WEEKLY          -     20    25   15    20      30    25    15    30
REQ

STOCK           140   120   95   80    60      180   135   145   110




WHEN &                           150           150
HOW
MUCH?

                                            Arrival from
             Order to                       Central Supply Facility
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   DISTRIBUTION CENTER III
   LEAD TIME IS 2 WEEKS, SAFETY STOCK IS 115, ORDER QUANTITY 800


DETAILS       0      1     2      3      4       5     6     7      8
WEEKS
WEEKLY        -      115   115    120    120     125   125   125    120
REQ
STOCK         1020   905   790    670    550     425   300   175    855



WHEN &                                                 800          800
HOW
MUCH?



 Order to                                    Arrival from
 Central Supply Facility                     Central Supply Facility
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    LEAD TIME IS 3 WEEKS, SAFETY STOCK IS 287, ORDER QUANTITY 2200
    CENTRAL SUPPLY FACILITY
                                 From I & II            From III


WEEKS         0      1       2      3      4     5        6      7       8
DETAILS

WEEKLY        -      -       -      650    -     -        800    -       -
REQ
STOCK         1250   1250    1250   600    600   600      2000   2000    2000


WHEN &                              2200                  2200
HOW MUCH?



                            TO MRP SCHEDULE          FROM PRODUCTION



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