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    MRP & ERP Introduction

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    Ravi Teja
    This document provides an overview of MRP, ERP, and their implementation. It discusses that MRP is a set of techniques that uses bill of materials, inventory, and production schedules to calculate material requirements. MRP aims to have the right materials in the right place at the right time. ERP expands on MRP by integrating additional business functions like finance, HR, and sales to provide a more holistic view of the enterprise. Implementing an ERP system is a complex process that requires significant resources and management support.

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    MRP & ERP Introduction

    Uploaded by

    Ravi Teja
    232 views22 pages
    This document provides an overview of MRP, ERP, and their implementation. It discusses that MRP is a set of techniques that uses bill of materials, inventory, and production schedules to calculate material requirements. MRP aims to have the right materials in the right place at the right time. ERP expands on MRP by integrating additional business functions like finance, HR, and sales to provide a more holistic view of the enterprise. Implementing an ERP system is a complex process that requires significant resources and management support.

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    This document provides an overview of MRP, ERP, and their implementation. It discusses that MRP is a set of techniques that uses bill of materials, inventory, and production schedules to calculate material requirements. MRP aims to have the right materials in the right place at the right time. ERP expands on MRP by integrating additional business functions like finance, HR, and sales to provide a more holistic view of the enterprise. Implementing an ERP system is a complex process that requires significant resources and management support.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    232 views22 pages

    MRP & ERP Introduction

    Uploaded by

    Ravi Teja
    This document provides an overview of MRP, ERP, and their implementation. It discusses that MRP is a set of techniques that uses bill of materials, inventory, and production schedules to calculate material requirements. MRP aims to have the right materials in the right place at the right time. ERP expands on MRP by integrating additional business functions like finance, HR, and sales to provide a more holistic view of the enterprise. Implementing an ERP system is a complex process that requires significant resources and management support.

    Copyright:

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    of 22
    At a glance
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    The key takeaways are that MRP is a technique that uses a bill of materials, inventory data and a master production schedule to calculate material requirements. MRP aims to get the right materials to the right place at the right time.

    The main inputs of MRP are the master production schedule, bill of materials and inventory record file. The main processing steps are exploding, time-phasing and lot sizing.

    The main outputs of MRP are primary reports such as gross requirements, scheduled receipts, projected on-hand, net requirements, planned order receipts and planned order releases. Secondary reports include exception reports.

    An Introduction to MRP & ERP Systems

    Debasish N. Mallick, Ph.D. Carlson School of Management University of Minnesota Fall 2002

    Agenda
    What is MRP & ERP? MRP Structure MRP Dynamics Lot Sizing Techniques MRP II ERP ERP Implementation

    Material Requirement Planning (MRP)


    A set of techniques that uses bill of material data, inventory data, and master production schedule to calculate requirement for materials.
    Source: APICS Dictionary 9th ed.

    MRP Objectives
    Get the right materials to the right place at the right time.

    MRP Structure
    Inputs

    Processing

    Outputs

    MRP Inputs
    Master Production Schedule Bill of Material Inventory Record File

    MRP Processing
    Exploding Time-Phasing Lot Sizing

    MRP Outputs
    Primary Reports

    Secondary Reports

    Master Production Schedule (MPS)

    Master Production Schedule (MPS)


    Specifies how many of each item to be produced in what time period Sometimes schedules major subassemblies and components only

    Bill of Material (BOM)

    Bill Of Materials (BOM)


    A complete description of the materials, parts, and components of a product and the sequence in which the product is created.

    Cooperstown Cars Inc. (BOM)


    Toy Car

    Wheel Assly. (2)

    Body (1)

    Axle (1)

    Wheel (2)

    Inventory Records (Item Master)File

    Inventory Records File


    Stores information on the status of each item by time period as well as their supply/manufacturing lead time.

    Cooperstown Toys Inc. Inventory Record File


    Item Description Toy Car Body Wheel Assembly Axle Wheel On-hand On-Order Back Order Lead Time 1 week 4 weeks 1 week 2 weeks 1 week

    MRP Processing
    "Explodes" the item requirements to the BOM table, level by level, taking into account the stock status of items in the inventory table Offsets the release date for the net requirement for each item by the lead time Rationale: For an item to be released for processing, all of its components must be available; the planned order release date for the parent item becomes the same gross requirement for the sub items

    Terminology
    * Gross Requirements * Scheduled Receipts * Projected on Hand * Net Requirements * Planned-Order Receipts * Planned-Order Releases

    Lot Sizing
    * Lot-for-lot * EOQ * Fixed Period * Part Period * Wagner-Whitin

    Cooperstown Car Inc.


    Item: Toy Car Lead Time: 1 week Period 1 Gross Requirements Scheduled Receipts Projected On-Hand Net Requirements Planned Order Receipts Planned Order Releases 2 3 4 5 6 7 8 9 10

    Cooperstown Car Inc.


    Item: Body Lead Time: 4 week Period 1 Gross Requirements Scheduled Receipts Projected On-Hand Net Requirements Planned Order Receipts Planned Order Releases 2 3 4 5 6 7 8 9 10

    Cooperstown Car Inc.


    Item: Wheel Assembly Lead Time: 1 week Period 1 Gross Requirements Scheduled Receipts Projected On-Hand Net Requirements Planned Order Receipts Planned Order Releases

    10

    Cooperstown Car Inc.


    Item: Axle Lead Time: 2 week Period 1 Gross Requirements Scheduled Receipts Projected On-Hand Net Requirements Planned Order Receipts Planned Order Releases 2 3 4 5 6 7 8 9 10

    Cooperstown Car Inc.


    Item: Wheel Lead Time: 1 week Period 1 Gross Requirements Scheduled Receipts Projected On-Hand Net Requirements Planned Order Receipts Planned Order Releases 2 3 4 5 6 7 8 9 10

    Primary Outputs
    * Planned Orders * Order Release Notices * Changes in Due Dates * Cancellations/Suspensions * Inventory Status

    Secondary Outputs
    * Planning Reports

    * Performance Reports * Exception Reports

    Benefits Of MRP
    * Reduction of forecast errors

    * Information for capacity planning * Information for financial planning * Ease of updating schedule

    Most Valuable Use of MRP


    * Assemble to stock

    * Assemble to order

    * Manufacture to order

    * Process

    Manufacturing Resource Planning


    * An expanded MRP * Plan and monitor all resources * Closed-loop system * Generate financial information Simulate the manufacturing system

    MRP II
    A method for effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning in dollars, and has a capability to answer what if questions.It made up a variety of functions, each linked together,

    MRP II System Components


    * Accounts payable/receivable * Capacity requirement planning * Data collection * Financial analysis * Sales analysis and forecasting * Inventory management * Master production schedule * Material requirement planning * Order entry and invoicing * Payroll * Production control and planning * Purchasing

    Closed-Loop in MRP II

    Problems with MRP II


    Integration

    Maintenance

    ERP System Components (SAP R/3)


    * Financial Accounting

    * Human Resources * Manufacturing and Logistics * Sales and Distribution

    Financial Accounting Module


    * Financials * Controlling * Asset Management

    Human Resources Module


    * Payroll * Benefits Administration * Applicant Data Administration * Personnel Development Planning * Workforce Planning * Schedule and Shift Planning * Time Management * Travel Expense Accounting

    Manufacturing And Logistics


    * Materials Management * Plant Maintenance * Quality Management * Production Planning and Control * Project Management System

    Sales And Distribution


    * Customer Management * Sales Order Management * Configuration Management * Distribution Management * Export Controls * Shipping and Transportation Management * Billing * Invoicing * Rebate Processing

    Why ERP?
    * Desktop Machines * Client-Server Architecture * Integrated Database * Real-Time Interaction * Consistent User Interface * Process Orientation * Common Platform * One Stop Shopping

    How ERP Works?


    * Ordering * Availability * Production * Manpower * Purchasing * Order Tracking * Planning

    Disadvantages of ERP
    * Inward-Facing * Closed programming standard * A push-based model of production * Complex Configuration * Expensive

    Implementation Effort
    * Size of the application * Management Support * Condition of the existing databases * Quality of the data * Amount of training required

    Learning never ends..


    6850-02: Managing Technology in the Supply Chain

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