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Ch 14 - Resource Planning

1. Materials Requirements Planning            (p646)
   1. Def - MRP - a technique for planning the quantity and timing of dependent-demand items by:
      1. Exploding component requirements from end item demand         (Example 14.1, p655-657)
      2. Adjusting component production schedules for leadtimes
      3. Subtracting available inventory to determine production quantities
   2. Objectives of MRP
      1. Ensure availability of materials
      2. Minimize inventory costs
   3. *MRP Inputs
      1. Master Production Schedule - time and quantity of desired end item products (Table 14.1 - p648)
      2. Product Structure File (Bill-of-Material File) - a list of the number of components and the required lead times for each end item, assembly, subassembly, . . . (Fig 14.5, p650)
      3. Inventory File (Item Master File) - quantity on hand, scheduled delivery dates, … (Table 14.3 - p653)
   4. MRP Outputs
      1. Planned Order Report - for production and purchasing depts. (See middle of p657)
      2. MRP Action Report - required actions due to cancellations, delays, shortages (Table 14.6 - p661)
                 Note: MRP systems are available for PCs
   5. Worksheet for MRP Application of OM Project - click here to download my worksheet, aommrp.xls.  It simulates a small MRP system.    
2. Capacity Requirements Planning              (p661)
   1. Def - CRP - a technique for planning the personnel and equipment capacities by:
      1. Converting tentative orders (from MRP) into std labor and machine hrs
      2. Adding to existing work center loading to determine total work center loading
      3. Modifying capacity and/or Master Production Schedule
   2. Objectives of CRP
      1. Ensure availability of personnel and equipment capacities
      2. Minimize excess capacity costs
   3. *CRP Inputs (Fig 14.8, p662)
      1. MRP Planned Order Release File - (Example 14.1, 657)
      2. Routing File - a list of the operations required to produce a component (For services, Bill of Labor File).
      3. Open Orders File - status of work-in-process jobs
   4. *CRP Outputs
      1. Work Center Loading Reports
      2. Verification of planned & released orders from MRP
      3. Modified Master Production Schedule
3. Closed-Loop MRP       (p664)
   1. Def - Closed-Loop MRP - a system that tightly integrates MRP and CRP (Fig 14.1 - p645).
   2. Closed-Loop MRP beneficial in services, such as accounting firms, restaurants, hospitals.
4. Enterprise Resource Planning (ERP)                 (p665)
   1. Def - ERP - a modular Closed-Loop MRP system that includes direct (EDI electronic data interchange and Internet) interfaces with customers and suppliers.
   2. ERP Modules (p666)
      1. Production and Materials Management Modules - include MRP and CRP described above.
      2. Sales and Marketing Modules - include complex product configuration, projection of accurate delivery dates, . . .
      3. Human Resources Modules - include workforce planning, training and development, . . .
      4. Finance and Accounting Modules - include activity-based costing, investment management, . . .
   3. ERP modules are fully integrated using a common database.
   4. ERP implementation has been, for some, difficult and costly (Dow Chemical, Hershey,  . . .  p669)
   5. Currently evolving ERP functions (p672)
      1. *Customer Relationship Management - focuses on managing customers, rather than products
         1. Uses database of point-of-sale data from physical stores, mail-order purchases, and online clickstreams.
         2. Determines relationships by data mining the database.
         3. Develops personalized marketing to individual preferences.
      2. *Supplier Relationship Management (p672)
         1. Enables collaborative production planning with suppliers
         2. Simplifies interactions with suppliers for deliveries, quality assurance, contracts, . . .
      3. *Collaborative Product Commerce (p672)
         1. Enables collaborative new product design with suppliers and customers
         2. Enables collaborative redesign of product and processes through out the product life cycle
         3. Allows designers to conduct online review sessions, track design action items, manage project documents, . . .   (Ch5, p196).
   6. ERP systems are critical components for successful Supply Chain Management (Ch 10).
                     (This page was last edited on August 16, 2006 .)