MODULE 3 - NPTELnptel.ac.in/courses/122106032/Pdf/3_4.pdf · Management Science II ... Inventory...

Management Science II Dr.T.T.Narendran

Indian Institute of Technology Madras

MODULE 3

Materials Management

Materials Requirements Planning (Mrp)

Materials Requirements Planning (Mrp)





A Typical Mrp







Comparison Of Mrp And Traditional Systems

Dimension MRP Traditional

Demand Dependent Independent

Order Philosophy Requirements Replenishment

Forecast Based on master schedule

Based on past demand

Control Concept Control on all items ABC

Objectives Meet manufacturing needs

Meet customer needs

Lot Sizing Discrete EOQ

Demand Pattern Lumpy but predictable Random

Types of Inventory Work-in-process and raw materials

Finished goods and spare parts



Logical Analysis Preceding Mrp

• When do we want to make how many of each product?

• What components are required?

• How many of each of these is already on hand?

• How many have already been ordered? When will they arrive?

• When are more needed and how many more?

• When should these be ordered?

Requirements For A Sound Mrp

• A valid master plan

• Accurate bills of materials

• Accurate information on current inventories

• Accurate information on orders already placed.

• Reliable lead times

• An adequate flow of materials

Pre-Requisites Of Mrp

• A time-phased master production schedule in which every item is described by bill of materials (BOM)

• A unique no. identifying each component and the parent in every BOM

• Properly structured, accurate BOM and tight control of engineering changes

• Accurate current inventory balances

• Accurate quantities and reliable delivery dates



• Reliable lead times

• Further requirements for practical application

• Computer software and hardware to handle huge volume of data

• Timely reporting of issues, receipts, inventory adjustments and order releases

• Discipline in handling and order releases

• Capable people (for handling and deciding)

Reasons For Failure Of Mrp

• It is part of an incomplete system

• Driven by an invalid / mismanaged Master Production Schedule

• Inaccurate data

• Improperly structured BOM

• Under qualified users



Manufacturing Resource Planning (Mrp-Ii)



Just In Time (Jit) Manufacturing



Steps To Jit Manufacture



Steps To Jit Manufacture Jit Vs. Mrp: A Comparison

JIT MRP

Vendors Part of your team Adversaries

Scrap Eliminate Tolerate

Maintenance Constant care to minimize breakdowns

Not critical, allow queues

Lead times Minimize Plan with them

Workers Involve them Impersonal-drive them

Inventory Liability, try to eliminate Asset, useful to absorb fluctuations

JIT VS. MRP: A COMPARISON (CONTD.)

JIT MRP

Lot size Bare minimum (Single piece?)

To balance set-up cost & holding cost

Set-ups Cut down the time Plan for them

Queues (WIP)

Eliminate PRO-ACTIVE

Necessary RE-ACTIVE

Suitability High to medium volume Medium to low volume



Evolution Of Manufacturing Control Systems Order Point system

Forecast with past data. Inventory control with EOQ and ABC analysis.

Mrp Based on Master schedule, B.O.M. and predicted demand. Complete inventory control. Convenient lot-size.

Evolution Of Manufacturing Control Systems (Contd.) Mrp Ii

• Incorporates capacity planning.

• Incorporates feed back.

Jit • Emphasis on waste reduction.

• Aim for Zero defect.

• Aim for Zero Inventory.

• Quick change-overs.

• Small lots.



Multi-Skilled Worker





Kanban







Inventory Control

Inventory Control Costs In Inventory Control

• Item cost or unit cost

• Ordering / set-up cost

• Clerical,

• administrative,

• expediting,



• transportation, etc.,

Costs In Inventory Control • Inventory carrying costs

• Locked-up capital

• storage space

• handling,

• taxes (?)

• insurance

• obsolescence,

• deterioration,

• maintaining records

• Shortage costs

• Overtime requirements due to shortage

• special clerical and administrative costs, expediting

• loss of goodwill (?)

• special transportation



• lost production time

Classification Of Inventory Models

• Static

• Dynamic

• Deterministic

• Probabilistic

• Uncertain

Probabilistic

Stock Level

Time �





A Typical Inventory Model

Order quantity

= Economic Order Quantity (EOQ) + Safety (buffer) stock

- inventory on hand

- units on order

+ average demand over lead time







Filename: CHAPTER 4

Directory: C:\Documents and Settings\User 1\Desktop\5

Template: C:\Documents and Settings\User 1\Application

Data\Microsoft\Templates\Normal.dot

Title:

Subject:

Author: User 1

Keywords:

Comments:

Creation Date: 6/29/2006 10:32:00 AM

Change Number: 24

Last Saved On: 7/21/2006 12:44:00 PM

Last Saved By: User 1

Total Editing Time: 544 Minutes

Last Printed On: 9/21/2006 11:55:00 AM

As of Last Complete Printing

Number of Pages: 25

Number of Words: 742 (approx.)

Number of Characters: 4,231 (approx.)

Date post:	03-Apr-2018
Category:	Documents
Upload:	doantruc
View:	219 times
Download:	6 times