04-07-2012, 02:41 PM
make up material requirements planning
• The first is to make sure that all products and materials are all in line. In order for successful production, all the products have to be there.
• The second component a company needs to keep tabs on is making sure they have very low inventory. Companies want to be able to produce their product whenever they needed, but they don’t want to have too much in excess in case the product should fail to sell. This is the concept of supply and demand.
• The third component is planning the manufacturing scheme. Companies need to know what exactly is getting produced by their company and where exactly it is being shipped to.
• Companies are trying to maximize the amount of money they bring in so there needs to be a good balance between the inventory of materials and being able to meet the demand of the customers. If companies don’t have the right balance then they will cost the company big dollars.
• Other important factors of material requirements planning involve ordering all the material’s at the right time. If production can’t begin at the right time, a company may fail to meet the deadline.
• Material requirements planning plays a major role in a lean manufacturing environment. Failure to have the necessary raw materials when required will result in lost production and potentially lost sales. Lack of control over the ordering of inventory will result in waste of inventory which leads to excess cost.
The necessary elements towards a successful MRP are a solid forecast, accurate inventory and knowledge of production status.
Forecast
Getting forecast from customers gives a good starting point. If not, it can be created on own based on the methods available (trends, seasonal information, historical data, etc.). Forecast can be daily, weekly, monthly, yearly or whatever other size bucket chosen. The smaller the window for the forecast, the more accurate it will be.
The forecast must be broken down into finished end items (referred to as a master production schedule or MPS in some facilities). This will drive the material requirements planning. Once the MPS is created, it is blown through bills of material to generate the total number of each type of component required. There is software available that will do all this once it has been properly set up. The software will take into consideration the amount of inventory on hand as well as planned orders. This is why inventory accuracy is so important. A basic MRP can be set up in a program such as excel.
Accurate Inventory
As stated earlier, accurate inventory is an essential part of running a good MRP system. In order to maintain inventory accuracy, a good cycle counting program is needed. MRP will take into consideration any on hand inventory as well as allocated inventory. From here it will calculate the amount of components required based on time frame (usually weekly buckets). Material requirements planning will also consider lead time for the components and show when the parts should be ordered. Inventory accuracy is so important, because without it, MRP will prompt to order too many parts or too few parts. Either of these scenarios will lead to waste.
Production Status
Knowing the production status of the manufacturing area will enable key decisions to be made regarding MRP. If they are behind schedule and do not expect to catch up without weekend overtime, a decision could be made to delay the delivery of parts in order to avoid excess parts in the building. Conversely, if the production area is ahead of schedule, we may want to expedite material delivery in order to prevent unnecessary downtime.
Uses
• Reduce Purchasing Cost
• Reduce Manufacturing Cost
• Reduce Lead Times
• Reduce Inventory Levels
• Reduce Component Shortages
• Reduce Freight Cost
• Reduction in Excess Inventory
• Reduce Overtime
• Improve Supply Schedules
• Improve Production Schedules
• Improve Calculation of Material Requirements
• Improve Productivity
• Improve Customer Service
• Improve Competitive Position
• Improve Communication
• Improve Plant Efficiency
• Improve Shipping Performance
• Less Scrap and Rework
• Simplified and Accurate Scheduling
• Higher Production Quality
Benefits
• Increased customer satisfaction due to meeting delivery schedules
• Faster response to market changes
• Improved labor & equipment utilization
• Better inventory planning & scheduling
• Reduced inventory levels without reduced customer service