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MANUFACTURING RESOURCE PLANNING

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Claro Publications Private Limited
Claro: Journal of Engineering

Research Article

CASE STUDY ON MANUFACTURING RESOURCE PLANNING

Janakkumar Tanna*a , Ankur Vyas*b


*a
K. J. Institute of Engineering & Technology, Savli, Asst. Prof., Faculty of Engineering,
Mechanical Engineering Department, Gujarat, India- 391770
*b
K. J. Institute of Engineering & Technology, Savli, Asst. Prof., Faculty of Engineering,
Mechanical Engineering Department, Gujarat, India- 391770

Abstract MRP has become a general term used to describe material


The gap between Manufacturing Resources requirements planning, closed-loop MRP and manufacturing
Planning (MRP II) system and the Flexible Manufacturing resource planning (MRP II).
System (FMS) and discuss several approaches for closing the The advent cheap computing power in the 1950s and 1960s led
gap. Considerable effort has gone into developing and to a rapid growth in number of companies using MRP. After
integrating the various modules in the MRP II system. The accounting and payroll systems, MRP was earliest computer
modules for business planning, production planning, master applications to become wide spread. MRP offered companies
production scheduling, material requirement planning, the ability to order goods according to actual requirements,
capacity requirements planning, and shop or control have rather than simply replenishing standard stock levels. Initially,
been integrated into a comprehensive computer package for MRP was used mainly purchased items followed, especially in
planning and controlling manufacturing. At the same time, a those factories where there was irregular demand and wide
similar effort has been underway to develop and integrate the range of items, such as in aerospace industry.
several subsystems of a FMS. In particular, a number of According to Browne et al. (1988), MRP and MRP II have
computer control systems have been developed to been the most widely implemented large scale production
automatically plan and control the operations of NC management systems since 1970s, with several thousand
machines with automated tool changers, automated material implementations worldwide. MRP has become a general term
handling, and automated test and inspection equipment. used to describe material requirements planning, closed-loop
Unfortunately, these two efforts have proceeded relatively MRP and (MRP II).
independently with little interaction between the two groups. The advent cheap computing power in the 1950s and 1960s led
If computer integrated manufacturing (CIM) is to become a to a rapid growth in number of companies using MRP. After
reality, the resulting gap must be closed, and closed rapidly. accounting and payroll systems, MRP was earliest computer
applications to become wide spread. MRP offered companies
Material Requirements Planning is a time phased the ability to order goods according to actual requirements,
priority-planning technique that calculates material rather than simply replenishing standard stock levels. Initially,
requirements and schedules supply to meet demand across all MRP was used mainly purchased items followed, especially in
products and parts in one or more plants. those factories where there was irregular demand and wide
range of items, such as in aerospace industry.
Information Technology plays a major role in According to Browne et al. (1988), MRP and MRP II have
designing and implementing material requirements planning been the most widely implemented large scale production
systems and processes as it provides information about management systems since 1970s, with several thousand
manufacturing needs (linked with customer demand) as well implementations worldwide.
as information about inventory levels. MRP techniques focus In paper,
on optimizing inventory. MRP techniques are used to explode  MRP Sheet concerns with MRP I and MPS sheet
bills of material, to calculate net material requirements and says about MRP II.
plan future production.
 Finally, C, C++ programming give easy way for
input of MRP I and MRP II. Open ERP is good
Keywords - MRP, MRP II, ATP, PAB, MPS, BOM software for flow handling in any module of
Manufacturing Resource Planning.
I. INTRODUCTION
Material requirement planning is use for mainly material Corresponding author: Tel: +91-9624808101, +91-
management purpose during product life cycle in company. It 979271267, +91-2667-222264
is good to handling purchase, warehouse, inventory and many E-Mail: janak.tanna@kjit.org
more. In this, project included part of material management for
a department. In brief, process steps for material for flow,
material requirement with each sub-department data.

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Claro: Journal of Engineering

MATERIAL REQUIREMENT PLANNING routing information. A separate file may be used for details of
Simple Material Requirement Planning: purchase parts. In some implementations the routing may be
Time Phasing:- also use in the routing or process file.
MRP is phased order release system that under ideal Routing File/Process File:-
circumstance schedule the order release for needed demand For each manufactured items, this gives sequence of operations
inventory items so that the items arrives just as they are and work centers used. If infinite capacity planning was in
required. operation then predicated or standard times for each operation
MRP calculate the date upon which an item may be ordered would be stored here.
either from factory or from supplier, by reference to the date on Work Centre File:-
which the items needed and items arrive. The simple operation This file stores details about each work center, such as costs
which is manually for limited number of items. associated with it, standard set-up available on it.
MRP requires backward scheduling each item from its Tool File:-
requirements date to launch production and purchase orders This file can be used in connection with the work center file
accordingly so that they will be completed on time. The main and the parts master file. It stores details about tools, jigs etc.
item MRP uses is lead time. which are required for particular operations. This allows the
Example:- MRP to order tools required for a specific operation.
All components of 50 widgets are required for assembly at start Bill of Materials:
of June, all parts have a lead time from order to delivery of one Ordering is usually for items required to make up a product to
month, and then order must be released at the start of May. satisfy a customer’s order, MRP systems almost invariably
Further, all parts will have same lead time, but particular time provide the means to store and manipulate the list of parts
for each item is stored in master file. The MRP software will required for each product. This is generally known as the bill of
release each work or purchase order from the parts list of each materials.
product the appropriate time before requirement date for each Inventory Management:
specific order. Items held in stock under various different policies MRP
The files use for MRP system:- systems almost always provide the ability to record details of
Bill of material:- current stock and items which are in stock but which are
The bill of material is a list of all purchase parts and raw already allocated to be used for a particular customer, and
material required to manufacture a finished product. It can be which are not therefore available for use.
broke down in sub-assemblies which turn into require other Dealing with orders:
purchase parts. The addition of these functions, where they are needed, makes
for a set of repetitive clerical task which lends itself to being
performed by computer. It is usually for MRP system also print
out the actual paperwork which is sent to suppliers or to
factory, transmits the information by electronics means, such as
e-mail.
Purchase orders may take a variety of forms according to the
contractual agreement between customer and suppliers.
Purchase orders to be print on multi-parts forms which carry
standard set of purchase conditions. Delivery notes and invoice
are used for tracking MRP.
Batch Cards, Travellers, Route Cards, Dockets identify the
items to be manufactured. It deals with manufacturing
operations required, expected or allowed time, quantity
requirements and quality requirements.
Figure 1 Operations:
Master Production Scheduling:- CLOSE LOOP MRP
This file, as its name implies, store company plan of to Oliver Wight sums up meaning of ‘closed loop’:
manufacture and when. It is derived from order receives from The term ‘close loop’ really has two meanings. It means that
customer and forecast orders. The accuracy of this file together the missing elements in the system like capacity planning, shop
with its efficient update required is fundamental to scheduling and vendor scheduling were filled in the system. It
effectiveness of MRP system. also means that there must feedback from vendors, from the
Inventory Status File:- factory, from the planner, etc. whenever there is any problem
The inventory status file keeps a record of amount of stock and in executing the plan.
usually stock transactions. As in the case of MPS, the accuracy Capacity planning:-
of this file is critical. This is because when BOM is exploded Standard MRP system takes the finished good requirements
and requirements for the next time period are calculated the and calculates the net material requirement. Closed loop
amount in stock is subtracted from the gross amount required, system perform same MRP function but go on to produce
giving the net amount required to be produced. Clearly, capacity plan. The same plan attempts to show the load
inventory status file will be incorrect then an incorrect amount required on each work station during production period,
will be manufactured. This can create excess stock or shortage. weather be in month, week or day. The capacity plan is
Parts Master File/Item Master File:- calculated by using the routing file to show the work load
This file holds the information related to ordering each part. which will be generated at each work station by net
The file normally stores the standard batch size, lead time and requirements. This shows total expected set-up and run times
stock categorization which part may have and sometime for all the items to be produced during the period.

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Closing the loop:- Operational planning in sales units


Closing the loop in MRP system involves providing the
feedback about progress. o Financial planning in monetary units (for example in
Standard hours: It is time as per capacity plan and as per rupees or dollars etc.)
schedule hour work should be completed in appropriate
manner.
 Further, an ideal MRP II system has simulation
Closed loop systems also update the system lead times. The
program may use calculate moving average which can be capacity to answer ‘what if’ questions.
adjusted by each new figure. In plants that are always busy,
this allows the lead time to get longer and longer. These  Output from various report MRP II function is
increases queuing and incase of urgent shipment order may usually integrated with financial report such as
delay in some other work. This seems in failure in completion financial plan, purchase commitment report,
of order. By increasing lead times in response to increasing inventory projections.
actual lead times the situation is worsened, not improved.
Finite capacity planning system added, then progress on  MRP II often integrated with a company’s
individual items can be scheduled and measured.
warehousing and distribution processes.
MANUFACTURING RESOURCE PLANNING:
Growing companies tend to develop systems to solve problems
MRP II is an approach to managerial planning, execution, and
as they arise. The philosophy behind MRP II is centralization
and coordination, allowing considering effort to be saved by control of productive activity.
everyone following the same system.
Traditionally, accounting figures were not based on same MRP II software can relate many information needs of all
information as manufacturing figures. For example, the functions and departments, including purchasing, accounting,
accounts department would have separate from manufacturing payroll, distribution, marketing, engineering, production
to calculate the inventory. This was because the manufacturing activity control and general managerial planning, measurement,
information was not believed to be accurate for accounting evaluation and control.
purpose- it was prepared by engineer, not accountants.
Production departments would often independently calculate MRP II is an explicit and formal manufacturing information
the work in progress measured in terms of ‘standard hours’. system that integrated marketing, finance and operations. It
Advanced user of closed loop MRP system realized that if the coordinates the sales and manufacturing plans to assure their
accuracy of inventory record good enough to support an MRP consistency. It converts resource requirements, such as
system then it would be good enough to support an MRP facilities, equipment, personnel, and material, into financial
system then it would be good enough to be used financial requirements and converts production outputs into monetary
purposes. This allowed the financial and production terms. It evaluate the organization’s ability to execute the plan
departments to work with the same, accurate, information thus financially and also evaluates the financial merits of plan in
allowing them to keep business plan up to date. terms of measures as profit, returns on investment and return
The linking of financial and manufacturing system is main step on assets.
in moving from closed loop MRP to MRP II. A Framework for the MRP II system:-
Meaning of Manufacturing Resource Planning (MRP II):- Following is overview of MRP II architecture which can divide
Manufacturing Resource Planning (MRP II) is method for the into three hierarchical levels:
effective planning of all resource of a manufacturing company. Planning Level Planning Horizon
It is made up of variety of interlinked functions, as shown in
such as: Strategic Planning One to five years
1. Strategic and Business Planning. Tactical Planning One month to three month
2. Demand Management. Operational Planning Quasi-real time to one year
MRP II architecture shown in a situation where a factory has
3. Sales and Operation Planning (S&OP, also called been subdivided into series of Group Technology based cells,
Production/Aggregate Planning). where each cell is responsible for family of products,
subassemblies or components and is managed by a Production
4. Master Production Scheduling (MPS) with Rough-Cut Activity System (PAC) system.
Capacity Planning.

5. Material Requirements Planning (MRP I)

6. Capacity Requirements Planning (CRP) and Vendor


Requirements Planning (VRP).

7. The Execution Support System for Capacity and Material


[Shop Floor Control (SFC), and Purchase Planning and
Control]

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It forms basic inputs of MRP by top management and


covers long time horizons. It includes overall planning of
product.

 Business Planning:

Business plan is statement of objective for overall aspect


at aggregate level. Sales and operational planning main
area for planning in this element. The business plans
defines: market share, new product planning, analysis of
competition, distribution and strategic planning, product
positioning to meet customer service objectives. The
markets to be addressed (target demographic and
geometric areas). Annual sales plan or forecast for overall
business or particular Make or buy decision.
MRP II encompasses three activities or phases:-
 Master Planning:
1. Demand Management:
The first activity is establishment of the overall direction for
Demand management encompassing areas are:
the firm, the resulting management plan stated in
Advertising, forecasting, customer order services,
manufacturing terms, such as end items or product options. The
distribution requirement planning.
manufacturing plan must be consistent with the company’s
direction and the plans for other departments of the firm. Thus, 2. Sales and Operation planning:
master planning is the set of activities and system for overall
direction setting it creates overall plans stated in production It mainly related to demand of market and product
terms. structure planning. It is necessary to evaluate every time
sales and operation planning in each stage. [1]
 Detail Planning of material flows and capacity:

The second MRP II activity is the detailed planning of material II. METHODOLOGY AND PROBLEM SOLVING
and capacity needs to support overall production plans.
Schematic of MRP shown in figure 1.
 Execution of plans: PROBLEM ON MRP:-
This will be explained through an example of electronics
The third and final MRP II activity is execution of material and calculator.
capacity plans in terms of detailed shop scheduling and Master Production Schedule
purchasing actions.
Order For WEEK
Elements of MRP II:
Calculator 23 24 25 26 27
Packed
1. MRP I
A 11 100
2. Strategic and Business Planning B 12 50
Bill of Material
3. Resource Requirement Planning Calculator Packed
Calculator Complete 1
4. Demand Management Lower Case Assembly 1
Lower Case Molding 1
Battery Cover 1
5. Product Configuration
Upper Case Assembly 1
Upper Case Moulding 1
6. Sales and Operational Planning Transparency 1
Circuit Board Assembly 1
7. Master Production Scheduling and Final Assembly Key Pad 1
Scheduling Screw 3
Carton 1
8. Rough Cut Capacity Planning Insert 1
Instruction leaflet 1
Strategic and Business Planning:-

 Strategic Planning:

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Problem on MRP I:
Bill of Material explosion (Some items
are not shown) Summary
Items Order Quantity of MRP
Calculator A11 100 information
Packed (Certain items only)
B12 50
Calculator A11 100 Week
Completed 19-27
B12 50 On-hand
Carton A11 100 Gross
B12 50 Net
Circuit Board A11 100 LT To-Order
Assembly B12 50
Keypad A11 100
B12 50
Lowe Case A11 100
Assembly B12 50
Screw A11 300
B12 150
Upper Case A11 100
Assembly B12 50

Problem on Master Production Scheduling Report (With PAB


Items Master File (Some Items are not and Regular ATP Calculation)
shown)
Items Lead Make/Buy It involves terms below:
Time
Calculator Packed 1 M  The Lead Time: It is number of period required to
Calculator 1 M manufacture or purchase time for an item. It is also
Completed called as cumulative time for components. It might
Carton 3 B be for a higher level of product or small level of
Circuit Board 4 B product.
Assembly
Keypad 4 B  On-hand: It is quantity of this item in physically in
Lowe Case 1 M stock.
Assembly
Screw 1 B  Lot Size: It is quantity of this item normally ordered
from the plant or supplier.
Upper Case 1 M
Assembly  Safety Stock: Additional stock of these items planned
to be in inventory as protection against unplanned
demand.

 Demand Time Fence: It is future master-schedule


periods inside which changes to MPS are accepted
due to excessive cost caused by schedule disruption.

 Planning Time Fence: It is future master scheduling


period inside which change to MPS are evaluated to
prevent costly.

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Problem on Master Production Scheduling Report (With Discrete ATP-WOL3=20-(20+5) =-5


Project Available Balance and Regular/Backward Cumulative ATP-WOL:
Available To Promise Calculation) 1st Period:
Cumulative ATP-WOL= On hand + MPS- Sum of Customer
STANDARD FORMAT FOR MPS Order before Next MPS
Week 1 2 3 4 5 6 Cumulative ATP-WOL1= 10+20-(12+5) =13
Subsequent Periods:
Forecast 10 10 10 10 10 10 Cumulative ATP-WOL= Prior-Period Cumulative ATP-
WOL+MPS-Sum of Customer Orders before Next MPS
Order 12 5 20 5 0 0 Cumulative ATP-WOL3= 13+20-(20+5) =8
[2]
PAB 18 13 13 3 -7 -
17 Data Analysis:
ATP 13 -5 Vat analysis is the methodology used to describe the logical
flows of raw material to finished good products. Bill of
Cum. 13 13 8 8 materials and parts routing are combined to reflect the logical
ATP product flows through a plant’s resources. Basic flows are
MPS 20 20
classified by shape including V (Funnel), A (Pyramid) and T
(Hourglass). These logical product structures providing
Discrete 8 0
ATP information plant design, staffing, planning and control and
Cum. 8 8 8 8 information system design. Each logical product structure has
ATP control points that simplify production planning, scheduling
and control.
LEAD TIME: 1
LOT SIZE: 20 Objective:
DEMAND TIME FENCE: 2
As per paper MRP and MRP II systems is need to well to
ON HAND: 10
understand and with one of the module and in that module need
SAFETY STOCK: 0
to take small problem need to define in proper manner and
PLANNING TIME FENCE: 4
after defining the problem need to implement in software for a
better conclusion.
Calculation:
For Project Available Balance: III. CONCLUSION AND DISCUSSION
Prior to demand time fence (DTF)
1st Period: For a particular given a problem MRP II system can give a
PAB= On-hand Balance + MPS – Customer Order better result with MRP I. It can reduce lead time and
PAB 1=10+20-12=18 progressively it can save time for manufacturing.
Sequencing Periods:
PAB 2=Prior Period PAB+MPS-Customer Orders
PAB 3=18=0-5=13
Acknowledgment
After the demand time fence (DTF) This is acknowledgements to NIRMA
PAB= Prior Period PAB+ MPS- Greater Value of Total UNIVERSITY, GUJARAT, INDIA for valuable
Customer Orders or Forecast education. Thankful with appreciation for short term
PAB 4=13+20-20 (Orders) =13 project for this paper.
PAB 5=13+0-10 (Forecast) =3
PAB 6= -7+0-10 (Forecast) = -7
Available to Promise (ATP) Calculations: References
Discrete ATP-WOL, Prior to demand time fence (DTF) BIBILOGRAPHY:
1st Period: 1. Stephen. J. Childe, University of Plymouth, A book of
Discrete ATP-WOL= On-hand balance + MPS- Sum of introductionof Computer Aided Production Management,
Customer Order before next MPS Chapman & Hill Publication, UK.
Discrete ATP-WOL1= 10+20-(12+5) =13
Subsequent Period: 2. P.B. Mahapatra, Panjab College of Engineering, A book of
Discrete ATP- WOL= MPS- Sum of Customer Orders before Computer Aided Production Management, Prentice-Hall of
Next MPS India publication, India.
Discrete ATP-WOL3= MPS- Sum of Customer Orders before
Next MPS

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Authors and Affiliations:

Janakkumar R. Tanna
M.Tech Mechanical-CIM, Nirma University
Currently working as an Asst. Proff., K.J.Institute of Engineering &
Technology, Savli, Dist: Vadodara-391770-Gujarat-India (GTU)

Ankur H.Vyas,
Currently working as an Asst. Professor in K.J. Institute of
Engineering and Technology, Savli , Dist: Vadodara-391770-
Gujarat-India (GTU)

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