MRP Procedures

Material requirements planning

Master production scheduling

Consumption based planning

Material requirements planning

1.It uses current and future sales figures.

2.The system calculates the requirements based on the warehouse stock, receipts, etc.

3.If externally procured then procurement proposals; if internal production then it leads to creation of planned orders, and also dependent requirements are calculated.

4.The best thing about this is that it leads to minimization of inventory, which leads to reduction of costs involved.

Master production scheduling

1.It is for used specifically for critical resources.

2.A separate run occurs for the MPS items, they are not included in the MRP run.

3.Basically, it ensures the availability of the critical resources which should not hamper the production by maintaining the stock

4.It also provides the facility to work on the production plan interactiv

Consumption based planning

1.It uses the past consumption data to calculate the future requirements.

2.It has no relation with the independent or dependent requirement instead it is triggered when the stock falls below the reorder point or by forecast requirements.It has three types of MRP procedures:

•Re-order point planning.

•Forecast based planning.

•Time phased planning.

Re-order Point Planning

•Procurement is triggered when the sum of plant stock and firmed receipts fall below the reorder point.

•Reorder point covers the material requirements during replenishment lead time.

•The safety stock takes care of both excess material consumption within the replenishment lead time and any additional requirements that may occur due to delivery delays

Re-order Point Planning

Re-order point is defined by :-

•Safety stock

•Replenishment lead time.

•Average consumption.Safety stock is defined by :

•Past consumption data.

•Vendor/ production delivery timelines.

•Service level.

•Forecast error.

Re-order Point Planning

•Manual Reorder point planningFormula=(procurement processing time+planned delivery time+GR processing time) + Safety stock

•Automatic reorder point planning

Forecast based planning

•It is also based on historical data, or the past material consumption data.

•Here the forecast values form the basis of the planning run.

•Based on the consumption pattern the system changes the forecast requirements for future.

Time phased planning

1.This is used specially in case if the planning cycle is known.

2.The materials planned using this is given an MRP date in the planning file.

3.This date is set when creating the material