MRP by hand as well. 1964, with Dick Alban as project leader. By 1975, MRP was implemented in 700 mrp and erp pdf. This number had grown to about 8,000 by 1981.
OP in 1983 and other concepts to classical MRP. Independent demand is demand originating outside the plant or production system, while dependent demand is demand for components. MRP takes as input the information contained in the BOM. MRP helps organizations to maintain low inventory levels.
It is used to plan manufacturing, purchasing and delivering activities. Manufacturing organizations, whatever their products, face the same daily practical problem – that customers want products to be available in a shorter time than it takes to make them. This means that some level of planning is required. Companies need to control the types and quantities of materials they purchase, plan which products are to be produced and in what quantities and ensure that they are able to meet current and future customer demand, all at the lowest possible cost. Making a bad decision in any of these areas will make the company lose money. If a company purchases excessive quantities of an item, money is wasted – the excess quantity ties up cash while it remains as stock that might never be used at all. Beginning production of an order at the wrong time can cause customer deadlines to be missed.
MRP is a tool to deal with these problems. MRP can be applied both to items that are purchased from outside suppliers and to sub-assemblies, produced internally, that are components of more complex items. How much is required at a time. When the quantities are required to meet demand. Details of the materials, components and sub-assemblies required to make each product. Output 1 is the “Recommended Production Schedule.
Output 2 is the “Recommended Purchasing Schedule. An order to a supplier to provide materials. Data integrity is also affected by inaccurate cycle count adjustments, mistakes in receiving input and shipping output, scrap not reported, waste, damage, box count errors, supplier container count errors, production reporting errors, and system issues. Additionally, the system design also assumes that this “lead time” in manufacturing will be the same each time the item is made, without regard to quantity being made, or other items being made simultaneously in the factory. A manufacturer may have factories in different cities or even countries. It is not good for an MRP system to say that we do not need to order some material, because we have plenty of it thousands of miles away.
This means that other systems in the enterprise need to work properly, both before implementing an MRP system and in the future. Production may be in progress for some part, whose design gets changed, with customer orders in the system for both the old design, and the new one, concurrently. MRP will correctly calculate needs and tracking for both versions. Parts must be booked into and out of stores more regularly than the MRP calculations take place. Note, these other systems can well be manual systems, but must interface to the MRP. The other major drawback of MRP is that it fails to account for capacity in its calculations. Generally, MRP II refers to a system with integrated financials.
An MRP II system can include finite or infinite capacity planning. But, to be considered a true MRP II system must also include financials. ERP has been the next step. The best practice is to physically verify the bill of material either at the production site or by disassembling the product. The best practice is to determine why a cycle count that increases or decreases inventory has occurred. Find the root cause and correct the problem from occurring again. This can be the most difficult area to maintain with any integrity.
Start with isolating the scrap by providing scrap bins at the production site and then record the scrap from the bins on a daily basis. One benefit of reviewing the scrap on site is that preventive action can be taken by the engineering group. Manual systems of recording what has been received are error prone. The best practice is to implement the system of receiving by ASN from the supplier. When the components are received into the facility, the ASN is processed and then company labels are created for each line item. The labels are affixed to each container and then scanned into the MRP system.
Extra labels reveal a shortage from the shipment and too few labels reveal an over shipment. Some companies pay for ASN by reducing the time in processing accounts payable. The container labels are printed from the shipper. The labels are affixed to the containers in a staging area or when they are loaded on the transport. The best practice is to use bar code scanning to enter production into inventory.