Materials Requirements Planning (MRP)
MRP is a planning tool geared specifically to assembly operations.
The aim is to allow each manufacturing unit to tell its supplier
what parts it requires and when it requires them. The supplier
may be the upstream process within the plant or an outside supplier.
Together with MRP II it is probably the most widely used planning
and scheduling tool in the world. MRP was created to tackle the
problem of 'dependent demand'; determining how many of a particular
component is required knowing the number of finished products.
Advances in computer hardware made the calculation possible.
Master Production Schedule
The process starts at the top level with a Master Production
Schedule (MPS). This is an amalgam of known demand, forecasts
and product to be made for finished stock. The phasing of the
demand may reflect the availability of the plant to respond.
The remainder of the schedule is derived from the MPS. Two key
considerations in setting up the MPS are the size of `time buckets'
and the `planning horizons'. A `time bucket' is the unit of time
on which the schedule is constructed and is typically daily or
weekly. The `planning horizon' is how far to plan forward, and
is determined by how far ahead demand is known and by the lead
times through the operation. There are three distinct steps in
preparing an MRP schedule:
- exploding
- netting
- offsetting.
Exploding
Explosion uses the Bill of Materials (BOM). This lists how
many, of what components, are needed for each item (part, sub
assembly, final assembly, finished product) of manufacture. Thus
a car requires five wheels including the spare. BOM's are characterised
by the number of levels involved, following the structure of
assemblies and sub assemblies. The first level is represented
by the MPS and is 'exploded' down to final assembly. Thus a given
number of finished products is exploded to see how many items
are required at the final assembly stage.
Netting
The next step is 'netting', in which any stock on hand is
subtracted from the gross requirement determined through explosion,
giving the quantity of each item needed to manufacture the required
finished products.
Offsetting
The final step is 'offsetting'. This determines when manufacturing
should start so that the finished items are available when required.
To do so a 'lead time' has to be assumed for the operation. This
is the anticipated time for manufacturing.
The whole process is repeated for the next level in the BOM
and so on until the bottom is reached. These will give the requirements
and timings to outside suppliers.
There are three major assumptions made when constructing an
MRP schedule:
- The first, and possibly the most important, is that there
is sufficient capacity available. For this reason it is sometimes
called to infinite capacity scheduling.
- The second is that the lead times are known, or can be estimated,
in advance.
- The third is that the date the order is required can be used
as the starting date from which to develop the schedule.
Reference
- Browne. J., Harhen. J, Shivnan. J., Production Management
Systems, Addison-Wesley, Wokingham, 1988.
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