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SPPTChap012

Chapter 12 discusses Material Requirements Planning (MRP) and its evolution into Manufacturing Resources Planning (MRP II) and Enterprise Resource Planning (ERP). It outlines the objectives of MRP, its benefits, difficulties, and how it translates master schedules into material requirements. The chapter also emphasizes the importance of accurate data and the role of ERP in providing real-time data for decision-making across organizations.

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8 views

SPPTChap012

Chapter 12 discusses Material Requirements Planning (MRP) and its evolution into Manufacturing Resources Planning (MRP II) and Enterprise Resource Planning (ERP). It outlines the objectives of MRP, its benefits, difficulties, and how it translates master schedules into material requirements. The chapter also emphasizes the importance of accurate data and the role of ERP in providing real-time data for decision-making across organizations.

Uploaded by

Nhi Nguyễn Trần Liên
Copyright
© © All Rights Reserved
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Chapter 12

MRP and ERP

Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Chapter 12: Learning Objectives
You should be able to:
LO 12.1 Describe the conditions under which MRP is most
appropriate
LO 12.2 Describe the inputs, outputs, and nature of MRP
processing
LO 12.3 Explain how requirements in a master production schedule
are translated into material requirements for lower-level
items
LO 12.4 Discuss the benefits and requirements of MRP
LO 12.5 Describe some of the difficulties users have encountered
with MRP
LO 12.6 Describe MRP II and its benefits
LO 12.7 Explain how an MRP system is useful in capacity
requirements planning
LO 12.8 Describe ERP, what it provides, and its hidden costs

12-2
Dependent vs Independent Demand

LO 12-3
12.1
MRP
Material requirements planning
(MRP):
A computer-based information system that
translates master schedule requirements for
end items into time-phased requirements for
subassemblies, components, and raw
materials.
The MRP is designed to answer three
questions:
1. What is needed?
2. How much is needed?
3. When is it needed?
LO 12-4
12.2
Overview of MRP

LO 12-5
12.2
MRP Outputs: Primary
Primary Outputs
 Planned orders
A schedule indicating the amount and timing of
future orders
 Order releases
Authorizing the execution of planned orders
 Changes
Revisions of the dates or quantities, or the
cancellation of orders

LO 12-6
12.2
MRP: Development
 The MRP is based on the product structure tree
diagram
 Requirements are determined level by level,
beginning with the end item and working down
the tree
 The timing and quantity of each “parent” becomes the
basis for determining the timing and quantity of the
“children” items directly below it.
 The “children” items then become the “parent” items for
the next level, and so on

LO 12-7
12.3
Example MRP

Shutter

Wood
Frames
sections
(2)
(4)

LO 12-8
12.3
Example MRP

LO 12-9
12.3
MRP Benefits
 Enables managers to easily
 determine the quantities of each component for a given order
size
 To know when to release orders for each component
 To be alerted when items need attention
 Additional benefits
 Low levels of in-process inventories
 The ability to track material requirements
 The ability to evaluate capacity requirements
 A means of allocating production time
 The ability to easily determine inventory usage via
backflushing
 Exploding an end item’s BOM to determine the quantities of the
components that were used to make the item
LO 12-10
12.4
MRP Difficulties
Consequence of Inaccurate Data
 Missing parts
 Ordering incorrect numbers of items
 Inability to stay on schedule
Other problems
 Assumptions of constant lead times
 Products being produced differently from the
BOM
 Failure to alter a BOM when customizing a
product
 Inaccurate forecasts

LO 12-11
12.5
MRP II
 Manufacturing resources planning (MRP II)
 Expanded approach to production resource planning,
involving other areas of the firm in the planning process
and enabling capacity requirements planning
 Most MRP II systems have the capability of performing
simulation to answer a variety of “what if” questions so they
can gain a better appreciation of available options and their
consequences

LO 12-12
12.6
Capacity Requirements Planning
 Capacity requirements planning (CRP)
 The process of determining short-range capacity
requirements.
 Inputs to capacity requirement planning
 Planned-order releases for the MRP
 Current shop loading
 Routing information
 Job time
 Key outputs
 Load reports for each work center

LO 12-13
12.7
Enterprise Resource Planning
 Enterprise resource planning (ERP)
 ERP was the next step in an evolution that began with
MRP and evolved into MRPII
 ERP, like MRP II, typically has an MRP core

 ERP provides a system to capture and make data


available in real time to decision makers and other users
throughout an organization.
 ERP systems are composed of a collection of integrated
modules

LO 12-14
12.8

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