1. MRP Systems MRP – Material Requirements Planning Commonly used method in industry to coordinate the production scheduling of end items and their associated sub components. Ford’s MRP systems is known as CMMS, common manufacturing management system.

2. MRP Systems End Item – final product that is to be shipped from the manufacturing facility (engine by engine code, replacement engine blocks, replacement crankshafts, etc…) General Idea: A desired production date for end-items is known, the inventory level of all components and sub- assemblies required by the end-item is known, the lead time to produce the subcomponents or delivery time of supplied parts is known, therefore scheduled the production of any shortfall of parts and subcomponents at a point in time to support the desired production date of the end-item.

3. MRP Systems Required information to support an MRP system: Master Production Schedule (MPS) Bill of Material (BOM) Inventory Status Records by each part or component Lead times Item master data

4. MRP Systems Master Production Schedule (MPS): Planned production quantities for end-items in each time period of the planning horizon. Planning horizon – length of time over which to plan the production schedule. This length of time must exceed the cumulative lead time to replenish an end-item through all production stages. Time period (or time bucket) – smallest unit of time in which end-item production is schedule. In practice, time buckets of one week are typical used.

5. MRP Systems Master Production Schedule (MPS): Example Production of 1000 no. 12468 staplers is planned for weeks 1, 2, and 3, followed by no more stapler production until week 6 in which 1500 staplers will be produced.

6. MRP Systems Bill of Material (BOM): A listing of all components required for each end-item. Example – personal stapler no. 12468. This stapler is assembled from 3 sub-assemblies. Insert Figure

7. MRP Systems Inventory Status Records: Dynamic information about the current level of inventory for all components designated in the BOM of each end item. In practice, accurate inventory levels are difficult to maintain. ExampleComponentInventory Status Top Assembly1212 Spring Assembly1150 Locator Plate146 Slide Pin558

8. MRP Systems Lead Times: the time from when an order to replenish a part is initiated until the part becomes available for use. Lead times in practice are variable, but for the MPS, a fixed value is applied, usually the mean plus some safety factor. ExampleComponentLead Time (weeks) Top Assembly1 Spring Assembly1 Locator Plate2 Slide Pin1

9. MRP Systems Item Master Data - unique data for each part or component. This data includes: unique part number annual demand nominal order quantity cost scrap rate production lead time resource requirements pointers to engineering drawings (if produced internally) vendor information (if purchased) etc…

10. MRP Systems Requirements explosion and order release plan: Example – order release plan for personal stapler no. 12468 Level One Planning – Top Assembly

11. MRP Systems Requirements explosion and order release plan: Example – order release plan for personal stapler no. 12468 Level One Planning – Spring Assembly

12. MRP Systems Requirements explosion and order release plan: Ex. – order release plan for personal stapler no. 12468, an order for 750 locator plates is expected to arrive early in week 1 * The 892 units released in week 1 will not arrive till week 3 unless some expedited actions occur Level Two Planning – Spring Assembly

13. MRP Systems Requirements explosion and order release plan: Ex. – order release plan for personal stapler no. 12468, a batch of 650 slide pins is just about complete. Level Two Planning – Spring Assembly

14. MRP Systems Recall the requirements explosion and order release plan from Ex. – order release plan for personal stapler no. 12468 How might you allow for quality losses and or demand variability and lead-time variability?

15. MRP Systems Scrap losses – recall on the item master data record, quality yield is a field which has been populated using historical data or a “guess”. If yield for the stapler top assembly is say 90%, then more units should be planned for release than are required for the planned end-items according to: Ex. If there is a 90% yield for for top assembly then:

16. MRP Systems Safety Stock and Safety Lead Time – to protect against demand variability and lead time variablity, a safety factor may be applied. Numerous application a safety factors exist, the simplest may be multiply by some percentage. Ex. If a 15% safety factor has been identified for top assembly then:

17. MRP Systems Rough-Cut Capacity Planning: When developing an MPS, one must consider if the schedule is feasible based on the capacity of workcenters within the plant. This is performed by determining the number of hours impact on all workcenters required to produce the end item, and identified by “time bucket”.

18. MRP Systems Rough-Cut Capacity Planning: For example, suppose for every unit of end item “A” that is planned for production, the following workcenters are impacted: Insert figure Part C has a 2-week lead time, and uses both workcenter 200 and 300. Part D consists of part E which requires WC 300 and part F (a purchased component).

19. MRP Systems Rough-Cut Capacity Planning: An aggregated, time phased profile for end item A and another end item B is shown below. Insert fig

20. MRP Systems Rough-Cut Capacity Planning: Given a master production schedule for the facility: And the time-phased load profile, results in the total resource requirements

21. MRP Systems Rough-Cut Capacity Planning: Given this rough cut capacity plan, and the knowledge that you operate a single shift 10 hours a day, and 6 days a week, do you foresee a problem? If so, how might you adjust?

22. MRP Systems Capacity Requirements Planning (CRP): Similar to rough cut capacity planning, but includes details such as current inventory levels and the impact of lot-sizing decisions. Ex. Assume initial inventory levels: Then net MPS becomes:

23. MRP Systems Capacity Requirements Planning: From the net MPS, the workstation loading levels by part: Therefore capacity plan is: Are there any concerns?