Resource PlanningERP—Enterprise Resource PlanningLecture OutlineSlide 4Material Requirements Planning (MRP)Demand CharacteristicsMaterial Requirements PlanningMRP Inputs and OutputsMaster Production ScheduleSlide 10Product StructureProduct Structure TreeMultilevel Indented BOMSpecialized BOMsSpecialized BOMs (cont.)Modular BOMsTime-phased BillsSlide 18Slide 19Slide 20Slide 21MRP: ExampleMRP: Example (cont.)Slide 24Basic MRP formulasMore formulasOn-hand inventorySlide 28Slide 29Slide 30Slide 31Slide 32Slide 33Slide 34Slide 35Slide 36Slide 37Lot Sizing in MRP SystemsUsing Excel for MRP CalculationsAdvanced Lot Sizing Rules: L4LAdvanced Lot Sizing Rules: EOQAdvanced Lot Sizing Rules: POQPlanned Order ReportMRP Action ReportCapacity Requirements Planning (CRP)CRPCalculating CapacityCalculating Capacity (cont.)Slide 49Reducing Over-load ConditionsSlide 51Slide 52Determining Loads and CapacitiesSlide 54Relaxing MRP AssumptionsEnterprise Resource Planning (ERP)ERP and MRPEvolution of ERP IIA lesson in Information ArchitectureGoldratt Methodology (Thinking Process)WHAT TO CHANGE CIRCA 1993: Problems with the Mainframe ArchitectureMore problemsComponents of any Software ApplicationComponents in briefMainframe ArchitectureGoldratt: We will build a treeSlide 67Slide 68WHAT TO CHANGE TO:HOW TO CAUSE THE CHANGE:Organizational Data FlowsERP’s Central DatabaseSelected Enterprise Software VendorsERP ImplementationCustomer Relationship Management (CRM)Supply Chain ManagementProduct Lifecycle Management (PLM)ERP and Software SystemsConnectivitySlide 80Copyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.Beni AsllaniBeni AsllaniUniversity of Tennessee at ChattanoogaUniversity of Tennessee at ChattanoogaResource PlanningResource PlanningOperations Management - 6th EditionOperations Management - 6th EditionChapter 15Chapter 15Roberta Russell & Bernard W. Taylor, IIIRoberta Russell & Bernard W. Taylor, IIICopyright 2006 John Wiley & Sons, Inc.Copyright 2006 John Wiley & Sons, Inc.14-14-22ERP—Enterprise Resource ERP—Enterprise Resource PlanningPlanningStarts with slide 56Starts with slide 56We will not be covering the material on We will not be covering the material on pages 647-667 of Chapter 15 until after pages 647-667 of Chapter 15 until after the second exam the second examCopyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-33Lecture OutlineLecture OutlineMaterial Requirements Planning (MRP)Capacity Requirements Planning (CRP)Enterprise Resource Planning (ERP)Customer Relationship Management (CRM)Supply Chain Management (SCM)Product Lifecycle Management (PLM)Copyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-44Resource Planning for ManufacturingCopyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-55Material RequirementsPlanning (MRP)Computerized inventory control and production planning systemWhen to use MRP?Dependent demand itemsDiscrete demand itemsComplex productsJob shop productionAssemble-to-order environmentsCopyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-66Demand CharacteristicsDemand Characteristics1122334455WeekWeek400 400 –300 300 –200 200 –100 100 –No. of tablesNo. of tablesContinuous demandContinuous demandM T W Th F M T W Th FM T W Th F M T W Th F400 400 –300 300 –200 200 –100 100 –No. of tablesNo. of tablesDiscrete demandDiscrete demandIndependent demandIndependent demand100 tables100 tablesDependent demandDependent demand100 x 1 = 100 x 1 = 100 tabletops100 tabletops100 x 4 = 400 table legs100 x 4 = 400 table legsCopyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-77Material Material Requirements Requirements PlanningPlanningMaterialrequirementsplanningPlanned order releasesWork ordersPurchase ordersRescheduling noticesItemmaster fileProductstructure fileMaster production scheduleCopyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-88MRP Inputs and OutputsMRP Inputs and OutputsInputsInputsMaster production Master production schedulescheduleProduct structure fileProduct structure fileItem master fileItem master fileOutputsOutputsPlanned order Planned order releasesreleasesWork ordersWork ordersPurchase ordersPurchase ordersRescheduling noticesRescheduling noticesCopyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-99Master Production ScheduleMaster Production ScheduleDrives MRP process with a schedule of Drives MRP process with a schedule of finished productsfinished productsQuantities represent production not demandQuantities represent production not demandQuantities may consist of a combination of Quantities may consist of a combination of customer orders and demand forecastscustomer orders and demand forecastsQuantities represent what needs to be Quantities represent what needs to be produced, not what can be producedproduced, not what can be producedQuantities represent end items that may or Quantities represent end items that may or may not be finished productsmay not be finished productsCopyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-1010Master Production Schedule Master Production Schedule (cont.)(cont.)PERIODPERIODMPS ITEMMPS ITEM1122334455Pencil CasePencil Case125125125125125125125125125125ClipboardClipboard85859595120120100100100100LapboardLapboard7575120120474720201717LapdeskLapdesk00505000505000Copyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-1111Product StructureTop clip (1) Bottom clip (1)Pivot (1) Spring (1)Rivets (2)Finished clipboard Pressboard (1)ClipboardCopyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-1212Product Structure TreeProduct Structure TreeClipboardLevel 0Level 0Level 1Level 1Level 2Level 2Spring (1)Bottom Clip (1)Top Clip (1)Pivot (1)Rivets (2)Clip Ass’y (1)Pressboard (1)Copyright 2009 John Wiley & Sons, Inc.Copyright 2009 John Wiley & Sons, Inc.15-15-1313Multilevel Indented BOMMultilevel Indented BOM0 - - - -0 - - - -ClipboardClipboardeaea11- 1 - - -- 1 - - -Clip AssemblyClip Assemblyeaea11- - 2 - -- - 2 - -Top ClipTop Clipeaea11- - 2 - -- - 2 - -Bottom ClipBottom Clipeaea11- - 2 - -- - 2 - -PivotPivoteaea11- - 2 - -- - 2 - -SpringSpringeaea11- 1 - - -- 1 - -