3201 ~ W1 & 2 - MRP R
Transcript of 3201 ~ W1 & 2 - MRP R
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Managing the Supply Chain :
Material Requirement Planning
(MRP)
Managing the Supply Chain :
Material Requirement Planning
(MRP)
BBA-SCM : 3201 Week 1 & 2
Tutor: Dr. Shirley YeungBBA-SCM Programme Co-ordinator,
Tel: +852-2636-7140 [email protected]
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1.2Introduction
Traditional Logistics SCM
- Activities occur within the - Networks of boundariesof a single companies thatorganization work together
and co-ordinateactions to deliver
a product to market
- Focus on activities, - Acknowledge alle.g. procurement, distribution activities, including
customer service &
new product develop-
ment
Hugos, Michael (2006) Essentials of Supply Chain Management, New Jersey: JohnWiley & Sons, Inc.
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1.3 IntroductionBasic patternofSCM practice Uniquesetofmarket demands and operating
challenges
Makedecisions individually and collectively in
thefollowing 5 areas:
Production,
inventory,
location,
transportation and
information
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1.3 Contd - 5 Action Areas in SCM
Production Inventory Location Transport-
ation
Informat-
ion
What
products?
How
much?
Bywhen?
Whatto
stock?
Howmuch
tostock?
Buffer
against
uncertainty
Facilities
forproduction
&
inventory
located?
Efficient
location?
Howto
move -Air? Sea?
Truck
delivery?
Uncertainty
compensated
forhigh level
ofstock
Howmuch
Info.needed/
shared?
Accurate?
Timely?
Info.for
decision
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1.4 Introduction
Toyota has renamed continuous improvement(Kaizen) as Lean Management (orToyotaProduction System). In 2006,the NetProfitoftheToyota Inc. has soared to US$14 billion,thehighest profit amongst all Japanese companies.
Incidentally, in 2006, Fords loss was alsoUS$14billion! By June 2007,they over-took GM as theWorlds largest carmanufacturer.
Sam Walton (FounderofWal-Mart),the Worldslargest corporation, has sai
d that my day is notfinish withoutimprovement .
Based ontheteachingofMasaaki Imai, LeanManagement consultant atToyota.Sam Ho hasdeveloped theLean 5-STM Management System.
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2.1 Inventory Management - 12.1 Inventory Management - 1
A. For stock outputs (in manufacture andpossibly supply systems):
(a) to providegood service to customers;(b) toprotect thefunctionfrom uncertainties
in demand;
(c) to permit manufactureorsupply of itemsineconomic batch quantities.
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2.2 Inventory Management - 22.2 Inventory Management - 2
B. For stock inputs (in manufacture, supply,transport and service systems):
(a) to permitfavorable purchase/provisionarrangements (e.g. price discounts andeconomic orderquantities);
(b) to protectthefunctionfrom uncertaintiesin supply.
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2.3 Inventory Management - 32.3 Inventory Management - 3
C. For customer input queues (intransport and service systems):
(a) toprotect functions fromuncertainties in demand.
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2.4 Inventory Management - 52.4 Inventory Management - 5
E. '80/20 rule', ABC or Pareto Curve
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2.5 Inventory Management - 62.5 Inventory Management - 6
E. Type of Inventory Control
(a) Order Point technique --
a new order of a predeterminedquantity is placed as soon as
the quantity in stock falls to orbelow the orderpoint.
(b) Periodic Review technique
-- stocks are reviewed at setintervals, and the order quantitydepends upon on-hand stock.
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3.1 Materials RequirementPlanning3.1 Materials RequirementPlanning
Probability forAvailability:
P = R N = 0.95 10 = 0.6
R = Prob.ofAvailability for1 itemN = No.ofItems
NettingNet quantity = gross quantity - stockon-
hand - stockon-order
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3.2 MPR Netting Example3.2 MPR Netting Example
Period 1 2 3 4 5 6
Gross Requirements 20 30 18 15 35 50
On-hand Quantity 0 40 10 0 0 0
Scheduled Receipts 60 0 0 0 0 20
Net Requirements 0 0 8 15 35 ?
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3.3 MRP Lot-Sizing3.3 MRP Lot-Sizing
Economic OrderQuantity (EOQ)depends on:
Unit cost Costofsettingup anorder
Holding cost
Demand pattern Quantity discounts
Handling cost
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3.4 MRP Off-setting (BOM- Bill ofMaterials)3.4 MRP Off-setting (BOM- Bill ofMaterials)
Level
Finished Item A 1
________|_________| |
Sub-Assembly B Sub-Ass.C 2
______|______| |
Part D Part E 3
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3.4 Bill ofMaterials (BOM) contd
BOM fora product lists the items thatgointothe product, includes:
- a briefdescriptionofeach item- specifies when
- inwhat quantity each item is needed inthe
assembly process- Computerizethrough labelling levels of
product structure
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3.5 MRP Explosion3.5 MRP Explosion
Level
Finished Item A 1
40 units required in Week 8
(lead time = 2 weeks)
_________|_________| |
Sub-Ass. B Sub-Ass. C 2
2 foreach A 1 foreach A
(lead time = 3wk.)______|_________
| |
Part D Part E 3
(3foreach B) (1 foreach B)
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3.6 MRP Requirements3.6 MRP Requirements
Requirements for :
B (Week 6) = 40 x 2 = 80
C (Week 6) = 40 x 1 = 40
D (Week3) = 80 x 3 = 240
E (Week3) = 80 x 1 = 80
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3.7 MRP Types3.7 MRP Types
Clean Sweep MRP
-- Neworders are planned totake account
ofchanged requirements.-- Affects all items used inthe company.
Net Change MRP
-- Previous actions updated toreflecttheeffectofchanges.
-- Only affects the items concerned.
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3.8 MRP Implementation3.8 MRP Implementation
MRP implementationrequires:
1. Accurate specification oftherelationshipsbetween assemblies and components.
2. Accuratelead time data.3. Realistic production schedules.
4. Accuratestock control data.
5. Provisionforscrap.
6. Computersystem to process large volumeofdata involved.
7. Due-date priorities areobeyed.
8. Disciplines and procedures must be accepted.
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The only silly questionisthe one which hasnot beenasked.
Do Harvard 1-minute Agenda now.
? ? ? - Q&A -
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ThankYouThankYou !