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AgendaIntroduction to Supply ChainIntroduction to Planning- MRP2MRPMRP in SAPMRP AreasMRP GroupsOutput & Evaluation of MRP runExamplesDifference between Lean Process and MRPQuestions

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Introduction To Supply Chain

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Definitions

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Supplier:-One who supplies goods or services.

Manufacturer:-One who uses Machines,Tools and Labour to produces Goods for use or for sale

Distribution System:-The organisational setup used make the goods or services available for consumption for the customer.

Customer:-A customer (also known as a client, buyer, or purchaser) is the recipient of a good, service, product, or idea, obtained from a seller, vendor, or supplier for a monetary or other valuable consideration.

Parameters For Planning

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DEMAND:-The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price.SUPPLY:-Make (something needed or wanted) available to someone

Introduction to Planning Process-MRP2

MRP-2

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Planning Strategies

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MTO (Make to Order) is a manufacturing process in which manufacturing starts only after a customer's order is received.Pull-type supply chain operation as the manufacturing is pulled by the demandIt refers to products that are built before a final purchaser has been identified, with production volume driven by historical demand informationPush-type productionAssemble to order is a production method that occurs when an item is assembled after receipt of a customer's order. The assembly are usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product

MRPMRP’s managerial objective is to provide "the right part at the right time” to meet the schedules for completed products.

Typically, it gives proposals to the supply chain organization on which items to produce or purchase, when and how much.

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Steps in the Planning Run

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BOM Explosion

Scheduling

Procurement Type

Lot-Size Calculation

Net/Gross Requirements Calculation 11

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33

44

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Net/Gross Requirement.

2500A – B = 2000

50005000

500500

25002500

Gross Requirement Planning

Net Requirement Planning

Independent Requirement (A)

Stock on Hand (B)

Firm Sales Order (C)

PlannedOrder

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MRP Summary

In put to MRPMaster Production scheduleInventory recordsLot size informationLead time informationBill of Material

Out put of MRPScheduled Procurement elementsException Messages

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MRP in SAP

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Re-Order Point PlanningStatistical Planning procedure.Prerequisite –the demand should be fairly constant.Generally used for Class B and C materials/Bulk materialsCan be used with two lot sizing procedures Fixed Lot and Replenish up to Maximum Stock level.

Re-Order point can be manually entered or automatically calculated.Available Stock=Plant Stock + Open Order Quantity(Purchase Order, Production Orders, Firmed Purchase requisitions)

Various MRP Relevant fields in MM

MRP TypeLot sizeReorder PointPlanning time FenceProcurement TypeSpecial Procurement TypePlanned delivery time

In House production TimeSchedule Margin KeySafety StockAvailability Check GroupTotal Replenishment Lead Time.

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MRP AreasThe MRP area represents an organizational unit for which material requirements planning is carried out independently.Why do we need MRP Areas?There are three types of MRP areas Plant ,Storage Location, Sub-contractor.By default when MRP is activated for each Plant an MRP area is created.Example scenarios in which MRP areas can be used.Advantages and Disadvantages of MRP areas

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Evaluation of MRP

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Schedule Margin Key

Difference between Lean Process and MRP

MRPMRP often relies heavily upon procuring dependent demand supplies to maintain inventory.A company often bases its production schedule on the procurement of secondary materials rather than consumer Demand.MRP is dependent upon planning so that materials needs are metMRP, for example, often relies upon product inventory to meet future customer orders.Companies that implement MRP are often reluctant to produce small lots of a finished product because of cost inefficiencies.

LeanLean on the other hand, strives to eliminate inventory and produce in a just-in-time mannerIt is totally dependent upLean is dependent upon execution so the finished good is delivered without waste. on Consumer demand.Lean, on the other hand, usually forces companies to produce as-needed.Those that use the lean concept, however, are likely to welcome small order batches

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