Mrp ii Essay Example For Students

Mrp ii Essay MRP IIWhile MRP I primarily address the inbound flow of inventory (materials management), MRP II adds other interfaces such as finance, marketing, and integrated logistics. Like MRP I, MRP II is a push inventory model which pushes product through manufacturing and distribution processes in order to meet forecast demand. However, it adds further dimensions to the basic model. MRP II not only considers the inbound flow of material, but also how much material can actually be handle within the plant. Furthermore, it actually handles production scheduling, labour needs, inventory budgets, and personnel needs. But the most important feature is the addition of the finance interface. This module provides the capability of transforming the operating production plans into financial terms, consequently the data can be used for financial planning and control purposes of a more general management nature. Another significant addition is the simulation module. This simulation capability enables man agement to perform a more comprehensive alternative planing work in developing the marketing and business plans. Operating variable could be regulated to examine the systemwide response to the proposed operating change. Besides MRP II includes the entire set of activities involved in the planning and control of production operations. It consists of a variety of functions of modules and includes production planing, resource requirement planning, master production scheduling, materials requirements planning (MRP I), shop floor control, and purchasing. Process of MRP II Step 1 Market Demand; the process begins with an aggregation demand from all sources. Examples of sources are firms orders, forecasts, and safety stock requirements. Step 2- Production Plan; with inputs from manufacturing, finance, and marketing, the production plan would be derived. Step 3- Rough-cut capacity planning; it involves short-term capacity considerations that are affected by irregularities in demand. It formulates benchmarks for the proper use of personnel, machines, and shifts. Bills of capacity and bills of labour resources are the primary inputs to determine rough-cut capacity. In the event of incapability in producing the require output (due to limitation of capacity), adjustment to the production plan would be made. Step 4- Master production schedule; formulation of the master production schedules provides a realistic, detailed, statement of what the firm expects. It is more detail than the aggregate plan, it translates the aggregate plan into specific numbers of specific products to be produced in a specific period of time. Step 5- Material requirements planning (MRP); MRP is the heart of the entire process (MRP II). When MRP comes into play, material and schedule requirements would be generated. Step 6- Capacity requirements planning; at this stage, the capacity requirement planning determine whether the firm has enough capacity (e.g. worker, space, money) to meet the schedules. Again, if schedules could not be met, some adjustment in the master production schedule would be required else requirements would be scheduled. Advantages of MRP IIThe advantages of MRP II includes:-Improved consistency in one-time customer delivery-Reduction in purchasing cost due to fewer expedited shipments-Fewer shortage and stockouts-Increase customer service level-Inventory reduction of one-fourth to one-third (cost reduced)-Higher inventory turnover -Improve responsiveness to demand changes-Allowing more planning flexibility Minimization of workforce overtimeProblems in Implementation of MRP IIImplementation an MRP II system is a monumental effort. The system requires a tremendous amount of information, which must be accurate if the system is to be successful. The MRP II systems is capable of affecting all function within Forgess marketing, production, purchasing, accounting, finance and logistic. All personnel who have any interaction with the MRP II system require training. Further, Forges must be committed to make the MRP II system work. The problems that occur in implementing MRP are frequently organizational and behavioral rather than technical. The effects of the RussoJapanese War on WW1 EssayThe next three-month is for closing the MRP loop which encompass shop-floor control, capacity requirement planning and purchasing. Routings, work centers and system preparation will commence simultaneously. Once finished, another pilot program will commence follows by the cutover program. By the end of the fifteenth month, the MRP loop would be closed. The last three-month is for the implementation of the MRP II which emphasis on financial planning simulations. Financial information and system preparation is to taken up the first 1 1/2 months. The remain time will be cater for implementation. By the end of the eighteenth month the entire process would be completed. ProductVendorInstalledUser BaseAverage PriceCaliach MRPManufacturing and Computer Systems71,000$20,000PC/MRP for WindowsSoftware Arts8,700$395BPCS Client/ServerSystem Software Associates8000+-NRSNRS Consulting6.000$40,000Impact Encore/AwardSyspro Group5,000$2,000/modR/3SAP America5,000-BAAN IVBann Company4,100$3,500-$5,000 per userADD+ON SoftwareADD+ON Software, Inc.4,000+ResellerJBA System 21JBA International4,000+-MOVEXIntentia4,000-APICS THE PERFORMANCE ADVANTAGE, September 1997, Volume , Number 9. Types of Software and their Average CostTable above shows the different types of MRP II software and their respective costs. These softwares were ranked top ten in the 1997 MRP II software survey. (Ordered by number of installed users) Caliach MRP from Manufacturing and Computer System was ranked first with the highest number of installed users of 71000 with an average price of $20000. PC/MRP for Windows was ranked second with an extremely low average price of $395. The price Software Arts (Vendor of PC/MRP) is offering is one of the lowest in the market. Therefore, a company that does not want to invest too much on implementing MRP II, PC/MRP would make good choice. ConclusionSoftware itself cannot make a company successful MRP II user. However, the lack of a reasonably set of software can keep a company from succeeding. Therefore to ensure a company to be successful MRP II users, a detail study must be done in choosing the right software (in term of cost and capability), education and training must also done extensively, and accuracy and integrity of data must be enforced.