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Basic concepts (MRP, MRP II and ERP).

Extracts from this document...

Introduction

CONTENTS 1. Basic Concepts 2 1.1 MRP 1.2 MRP II 1.3 ERP 2. Typical features found in some commercial MRP/MRP II systems 4 3. Some of the commercially available MRP/MRP II systems 5 3.1 Pc/MRP 3.2 Finesse MRP 3.3 Vormittag Associates Inc. 4. Difference between a MRP II and an ERP System 9 5. MICROSS EXERCISE PRINT OFF 10 6. MICROSS vs 4th Shift ERP Package 11 7. General Procedures to select a suitable MRP/MRP II System for a medium sized manufacturing company 12 8. Conclusion 14 9. References 15 BASIC CONCEPTS (MRP, MRP II and ERP): MRP MRP stands for Material Requirements Planning. MRP is widely recognised as one of the most valuable management tools. MRP strives to improve manufacturing efficiency by managing the production schedule, reducing inventory, increasing cash flow, and delivering products in a timely manner. MRP is a tool used in the inventory management of depended components in manufacturing operations. It is a set of techniques that uses bills of material, inventory data, and the master production schedule to calculate requirements for materials [6]. In short, it aims at planning and controlling purchasing and manufacturing operations in response to a certain manufacturing process. MRP II MRP, which started out as a better way to order material, has evolved into MRP II. MRP II is a total company-wide system. It is a way to get all the people in the company working to the same game plan; to the same set of numbers [18]. A Company can now plan material, capacity, finance, marketing strategy, etc. all with the same system. In addition, all these things can be simulated to provide the management of the company with real planning capability. MRP II has proven to be an effective management weapon. The definition of MRP II as defined by the 9th edition of the APICS [9] dictionary is: A method for the effective planning of all resources of a manufacturing company. ...read more.

Middle

2. Finesse MRP Finesse MRP provides powerful tools for managing production requirements by comparing material needs with the available inventory and work in progress. It plans and manages material and production using the defined requirements. MRP accepts independent demands created directly through the projects, contracts and job module, Master Scheduling or via sales orders in order entry. Also there's no limit to its planning horizon; non-nettable and expired inventory is automatically excluded and scrap or yield is also considered. Finesse MRP works seamlessly across plant-site boundaries to accommodate multiple inventory locations and aggregate inventory. General Features: * Multi-company, plant and warehouse planning * Multi-project capabilities * Gross and actual requirements * Open, firm, planned and scheduled orders * Job scheduling * User-defined period date ranges * Handle detail, scroll and summary inquiries * Bucketless processing * On hand, safety stock and lot analysis * Projected on hand and net requirements * Planning bill of materials * Planning product families * Economic order quantity planning * Report writer provides all standard reports in multiple formats 3. Vormittag Associates, Inc. The MRP system is tightly integrated with the Customer Orders, Inventory, Sales Analysis (Forecasting), Purchasing, and the Manufacturing modules of System 2000, and is sensitive to company and location (plant) specific criteria. MRP analyses the existing on-hand position of an item, open purchase orders, open manufacturing orders (including planned, stock, and custom orders), open commitments (open customer orders, future orders), the sales forecast, and then produces a balance. This analysis can be viewed on-line daily, weekly, or monthly by selecting the appropriate option. Complete pegging is supported allowing the user to view critical data such as when purchase orders are due, when manufacturing orders are due to be completed, and the actual customer orders making up the commitments of an item. An MRP run will generate suggestions based on parameters such as minimum balance, lead time, etc. ...read more.

Conclusion

It is therefore required that the interface be simple enough for the casual user to operate while displaying the complex information needed to ensure that appropriate operation. Global Processing The recent trend in manufacturing has resulted in many SMEs running their operations across multiple sites. In order to integrate all the sites it is necessary to deploy a single MRP/MRP II system that allows information to be shared and executed across different locations. It should be able to provide inventory visibility across all the locations. CONCLUSION: Organisations are starting to transform themselves from integrated organisations focused on optimising internal organisational functions to more-agile, core-competency-based entities that strive to position the organisation optimally within the supply chain and the value network. With increasing competition customers have become more demanding. The product life cycles have come down drastically. New technologies are changing the way organisations do business. A planning & control system like MRP/MRP II is becoming less relevant in today's context. This is because manufacturing is moving towards produce on demand environment. The present is seeing a transition of products from being standardised to being customised. Hence making the business process difficult and complex. Also there is a need for greater integration with the customers and suppliers, which at present the MRP or MRP II system does not provide. No doubt MRP/MRP II has assisted companies in improving the business performance. But it is not totally free of drawbacks, which arise due to the basic design of the system. They help in the planning and control of processes internal to the organisation. But they do not provide means with which the organisation can be integrated with its customers and suppliers. Organisations the world over have implemented MRP or MRP II software, and are now looking for a way to extend access to scheduling, delivery, inventory, manufacturing, invoicing and planning information to customers and partners. With the ERP systems becoming more and more affordable the focus is now shifting towards implementing ERP rather than MRP or MRP II. My personal opinion says that MRP/MRP II is in its final days. ...read more.

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