0201b aggregate resource planning

AGGREGATE RESOURCE PLANNING

A presentation by:

Marcelo Augusto A. Cosgayon

ELEMENTS OF RESOURCE PLANNING

1. Material Requirements Planning (MRP)2. Capacity Requirements Planning (CRP)3. Enterprise Resource Planning (ERP)4. Customer Relationship Management (CRM)5. Supply Chain Management (SCM)6. Product Lifecycle Management (PLM)

MATERIAL REQUIREMENTS PLANNING (MRP)A production planning, scheduling, and inventory control system used to manage manufacturing processes.

OBJECTIVESThe main objective of any inventory system is to ensure that material is available when needed.One objective of MRP is to maintain the lowest possible level of inventory. MRP does this by determining when component items are needed and scheduling them to be ready at that time, no earlier and no later.

BENEFITS• Able to handle inventory of different materials like:

• raw materials• components •finished goods

• Incorporates other production scheduling system activities:•planned purchasing activities• manufacturing activities• delivery schedules

• Ability to keep schedules valid and up to date

RESOURCE PLANNING FLOWCHARTSales and Operations Plan

Shop Floor ControlInventory

Capacity Requirements Planning

Material Requirements Planning

Master Production Schedule

Customer OrdersForecast

Feasible?

Feasible?

Purchase Orders Work Orders

Manufacture

Yes

Yes

No

No

WHEN TO USE MRP• Dependent and discrete demand items• Complex products• Job shop or erratic production• Assemble-to-order environments

INPUTS AND OUTPUTS IN MRP PROCESS• Master Production Schedule• Product Structure File• Item Master File• Planned Order Releases• Work Orders• Purchase Orders• Rescheduling Notices

MASTER PRODUCTION SCHEDULEThe Master Production Schedule (MPS) provides a comprehensive schedule for production, controlling the following:• what to produce• how many are needed• when these are needed

PRODUCT STRUCTURE FILEA file that contains a computerized bill of material for every item produced

Bill of material (BOM): a list of all the materials, parts, and assemblies that make up a product, including quantities, parent–component relationships, and order of assembly

BILL OF MATERIAL (BOM)A list of all the materials, parts, and assemblies that make up a product, including quantities, parent–component relationships, and order of assembly

KINDS OF BILLS OF MATERIAL• Phantom – materials immediately consumed• K Bill - group small, loose parts such as fasteners, nuts, and bolts together• Modular - major subassemblies or modules that are later assembled into the final product with customer-designated options• Time Phased – shows lead time to purchase or manufacture an item

ITEM MASTER FILEContains an extensive amount of information on every item that is produced, ordered, or inventoried in the system. Also known as an inventory fileContains:• on-hand quantities• on-order quantities• Lot sizes.

• safety stock• lead time• past usage figures

INPUTS AND OUTPUTS IN MRP PROCESSMaster Production Schedule

Product Structure File

Material Requirements Planning

Planned Order Releases

Rescheduling NoticesPurchase OrdersWork Orders

Item Master File

CAPACITY REQUIREMENTS PLANNING (CRP)The process by which a company figures out how much it needs to produce, and determines if it is capable of meeting those production goals. 

MAJOR INPUTS TO CRP• Planned Order Releases – from the MRP process• Routing File - specifies which machines or workers are required to complete an order from the MRP plan, in what order the operations are to be conducted, and the length of time each operation should take•Open Orders File - contains information on the status of jobs that have already been released but have not yet been completed.

MAJOR INPUTS TO CRP

Capacity Requirements

PlanningOpen Orders FileRouting File

Planned Order Releases

Load Profile

CALCULATING CAPACITYCapacity is the maximum capability to produce. Measured in:• units of output• money of output• hours of work• number of customers processed

FACTORS AFFECTING CAPACITY• Product or Service Mix• Choice of technology• Size of facility• Resources allocated

CAPACITY TERMSRated capacity - theoretical output that could be attained if a process were operating at full speed without interruption, exceptions, or downtimeEffective capacity - takes into account the efficiency with which a particular product or customer can be processed, and the utilization of the scheduled hours of workUtilization – percentage of available working time actually usedEfficiency - how well a machine or worker performs compared to a standard output levelLoad - standard hours of work (or equivalent units of production) assigned to a production facility.•

ENTERPRISE RESOURCE PLANNINGEnterprise Resource Planning (ERP) is an industry term for the broad set of activities that helps an organization manage its business, mainly by collecting, storing, managing, and interpreting data from such activities as:•Product Planning•Manufacturing or Service Delivery•Marketing and Sales•Inventory Management•Shipping and Payment•Finance

ENTERPRISE RESOURCE PLANNINGSoftware that organizes and manages a company’s business processes by sharing information across functional areas. It transforms transactional data into useful information that supports business decisions in other parts of the company

MAIN CATEGORIES OF ERP MODULES1. Finance and accounting2. Sales and marketing3. Production and materials management4. Human resources

ERP VENDORSVendor Type

SAP Large enterprise, discrete manufacturingOracle Large enterprise, discrete manufacturing and servicesPeopleSoft Human resources and employee relationship managementSiebel Systems Customer relationship managementMicrosoft Dynamics Small to mid market ERP, CRMI2 Technologies Supply chain managementPTC, EDS, Dassault Systems

Product lifecycle management

SCT Process Industry Education, energy

STEPS IN CHOOSING ERP• Analyze business process• Choose modules to Implement• Align level of sophistication• Finalize delivery and access• Link with external partners

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)Refers to practices, strategies, and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)Software that plans and executes business processes involving customer interaction, such as sales, marketing, fulfillment, and customer service.

SUPPLY CHAIN MANAGEMENT (SCM)The oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies.

SUPPLY CHAIN MANAGEMENT (SCM)Includes 1. Supply chain planning2. Supply chain execution3. Supplier relationship management

SUPPLY CHAIN MANAGEMENT (SCM)Supply Chain Planning involves designing the supply chain network, demand planning, and collaborative supply planning.

SUPPLY CHAIN MANAGEMENT (SCM)Supply Chain Execution involves fulfillment, manufacturing, and delivery

SUPPLY CHAIN MANAGEMENT (SCM)Supplier Relationship Management handles all the interactions with suppliers from supplier certification to quality assurance, contracts, and agreements

PRODUCT LIFECYCLE MANAGEMENT (PLM)The process of managing the entire lifecycle of a product from inception, through engineering design and manufacture, to service and disposal of manufactured products.

PRODUCT LIFECYCLE MANAGEMENT (PLM)Software that manages the following:1. Product development process2. Product lifecycles3. Design collaboration with suppliers and

customers.

PRODUCT LIFECYCLE MANAGEMENT (PLM)• Manages product data through the life of the product• Coordinates product and processes redesign• Collaborates with suppliers and customers in the design process

INTEGRATION OF ELEMENTS

Suppliers

Customers

Product Design Manufacture and Delivery

Collaborative

Design Collaborative

Manufacture

Collabor

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Design

Collaborative

Manufacture

Product Lifecycle

Management (PLM)

Enterprise Resource

Planning (ERP)

Supply Chain Management (SCM)

Customer Relationship Management (CRM)T

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ELEMENTS OF RESOURCE PLANNING

1. Material Requirements Planning (MRP)2. Capacity Requirements Planning (CRP)3. Enterprise Resource Planning (ERP)4. Customer Relationship Management (CRM)5. Supply Chain Management (SCM)6. Product Lifecycle Management (PLM)