Material Requirements Assignment Help
Material Requirements Planning(MRP) is scheduling, production planning, and inventory control system that is used to manage manufacturing processes. Most Material requirement planning systems are software-based though it is possible to conduct MRP by hand as well.
The Material requirement planning system is intended to meet three objectives simultaneously which are given below:
- Ensure products are available for delivery to customers and materials are available for production
- Maintain the product levels in store and the lowest possible material
- Delivery schedules, plan manufacturing activities and purchasing activities.
Before computers dominated the industry, Prior to MRP, / reorder-quantity (ROQ), reorder point (ROP) type methods like EOQ (or Economic
Order Quantity) had been used in manufacturing and inventory management
As a response to the Toyota Manufacturing Program in 1964, Joseph Orlicky developed Material Requirements Planning. In 1964, the first company to use MRP was Black & Decker, with Dick Alban as project leader. Material Requirement Planning was implemented in 700 companies by 1975. In 1981, this number had grown to about 8,000. Oliver Wight developed MRP into manufacturing resource planning (MRP-II) in 1983. Joe Orlicky's MRP evolved into Oliver Wight's manufacturing resource planning (MRP-II) that brings, rough-cut capacity planning, master scheduling, capacity requirements planning in the 1980s. In 1983, S&OP and other concepts to classical MRP. Mainly One-third of the software industry was MRP II software that is sold to American industry ($1.2 billion worth of software) by 1989.
Independent Demand vs Dependent Demand:
Dependent demand is demand for components whereas, Independent demand is a demand which is originating outside the production system or plant. The bill of materials (BOM) specifies the relationship between the end product and the components.
The basic functions of an MRP system include the bill of material processing, inventory control and elementary scheduling. It helps organizations for maintaining low inventory levels. It is used to plan purchasing, manufacturing and delivering activities.
Whatever is the products of manufacturing organizations, they face the same daily practical problem. Some level of planning is also required. Companies need to control the quantities of materials they purchase and the types, plan which products needs to be produced in what quantities, and ensure that they are able to meet future and current customer demand. In any of these areas, making a bad decision will make the company lose money. Few examples are given below.
- When a company purchases insufficient quantities of an item which is used in manufacturing, it might be unable to meet contract obligations for supplying products on time.
- If a company purchases excessive quantities of an item, the money is wasted - the excess quantity ties up cash though it remains as stock and might never even be used at all.
- Beginning production of an order at the wrong time can cause customer deadlines to be missed
Material Requirement Planning is a tool to deal with these problems. It provides answers for few questions:
- How many are required?
- What items are required?
- When are they required?
The data that needs to be considered includes the following:
- How much is required at a time?
- Shelf lives off stored material
- When are the quantities required to meet demand?
- The items or end items being created. This is sometimes called Level "0" on BOM Independent Demand.
- Inventory status records. Records of net materials that is available for use already in stock (on hand) and materials on order from suppliers.
- Bills of materials. Details of the components, materials and sub-assemblies are required to make each product.
- Planning Data. This includes all the directions and restraints to produce the end items. This includes items such as Labour, Routing and Machine Standards, Testing and quality Standards, push commands or Pull/Work Cell, scrap percentages, Lot-sizing techniques (i.e. Fixed Lot Size, Lot-For-Lot, Economic Order Quantity), and other inputs.