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RESOURCE

PLANNING
MRP & ERP
MRP
 Material requirements planning is a software-based production planning
and inventory control system that has been used widely by
manufacturing firms for computing dependent demand and timing
requirements.
 Material requirements planning is used to calculate the exact quantities,
need dates and planned order releases for components and
subassemblies needed to manufacture the final products listed on the
MPS
For MRP, a dependent demand management
system, to work effectively, it requires:
 (1) the independent demand information (the demand for the final
product or service part) from the MPS;
 (2) parent-component relationships from the bill of materials, including
the planning factor and lead-time information; and
 (3) the inventory status of the final product and all of the components.
terms as they apply
to the MRP
 Parent- Item Generating  Explosion
 Components-parts demanded by a parent.  Planning factor
 Gross requirement- Demand an item by  Firmed planned order
time period
  Pegging
Net requirement-Number of item to be
provided  Low-level coding
 Scheduled receipt-Material Already order  Lot size
 Projected on-hand inventory  Safety stock
 Planned order release
 Time bucket
Example of MRP
Model A’s production schedule for the ATV Corporation is used to illustrate the MRP logic. Its gross
requirements are first obtained from the master production schedule and the inventory
status shows that 30 units of Model A are available at the start of the year. The parent-component
relationships and planning factors are available from the BOM , Assuming the following
lot sizes (Q), lead times (LT) and safety stocks (SS) are used, the MRP computations of the Model A
ATV and some of its components are as follows:
Example of MRP
MPS
BOM

Gross Requirement
on level 1 BOM
Example of MRP BOM

Level 0

Level 1

Level 2

Level 3
Capacity Planning
The material plans (the aggregate production plan, the master production
schedule, and the material requirements plan) discussed so far have focused
exclusively on production and materials management, but organizations must
also address capacity constraints..

Capacity refers to a firm’s labor and machine resources. It is the maximum


amount of output that an organization is capable of completing in a given period
of time

rough-cut capacity plan (RCCP) Check Feasible of MPS


Capacity Strategy
The material plans (the aggregate production plan, the master production
schedule, and the material requirements plan) discussed so far have focused
exclusively on production and materials management, but organizations must
also address capacity constraints..

Capacity refers to a firm’s labor and machine resources. It is the maximum


amount of output that an organization is capable of completing in a given period
of time

rough-cut capacity plan (RCCP) Check Feasible of MPS


Distribution Requirements Planning
Distribution requirements planning (DRP) is a time-phased finished-
goods inventory replenishment plan in a distribution network.
Distribution requirements planning is a logical extension of the MRP
system, and its logic is analogous to MRP
MRP II
 Manufacturing resource planning was an outgrowth of the closed-loop
MRP system. Business and sales plans were incorporated, and a
financial function was added to link financial management to
operations, marketing and other functional areas
ERP
The typical ERP system is an umbrella system that
ties together a variety of specialized systems, such
as production and inventory planning, purchasing,
logistics and warehousing, finance and accounting,
human resource management, customer
relationship
management and supplier relationship management
using a common, shared, centralized
database
ERP Engineering
 ERP System Engineering in the organization is in the form of the
implementation of the ERP concept in full.
 ERP implementation can also refer to stages of system implementation in
general and the strategy used
 Aspects studied in each stage covers multiple dimensions:

Organization
Human
Information
Technology

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