Om MRP PDF

Basics of MRP
MRP stands for Material Requirements Planning. It is a planning and

scheduling system used in manufacturing to ensure that the necessary
materials and resources are available when needed for production. MRP is
used to determine the quantity and timing of raw materials and components
needed to fulfill production requirements and to ensure that inventory levels
are adequate to support production.
The basic inputs to an MRP system are the master production schedule (MPS)
and the bill of materials (BOM). The MPS is a statement of what the company
plans to produce, while the BOM lists the components required to make each
item in the MPS. The MRP system uses this information to calculate the
amount of each component needed, taking into account lead times for
procurement and manufacturing.
The MRP process typically involves the following steps:
1. Determining the demand for finished goods based on the MPS

2. Exploding the BOM to determine the requirements for each
component
3. Checking inventory levels to see if there is sufficient stock on hand
to meet demand
4. Calculating the net requirements for each component by
subtracting inventory levels from demand
5. Determining when the components are needed based on lead
times and the production schedule
6. Generating purchase or production orders for the required
components.
By using an MRP system, companies can reduce inventory costs by ensuring

that they have the necessary materials on hand when needed, while also
avoiding stockouts that can delay production and increase costs. MRP can
also help companies improve production efficiency by ensuring that resources
are used effectively and that production schedules are met.
ERP
 ERP stands for Enterprise Resource Planning. It is a type of software that companies
use to manage their business processes, including financials, human resources,
supply chain management, customer relationship management, and more.
 An ERP system integrates all of these processes into a single, unified system, allowing
companies to streamline operations and improve efficiency. By providing a
comprehensive view of the entire organization, ERP systems enable decision-makers
to make informed decisions based on real-time data.
 Some of the key benefits of ERP systems include:
 Improved efficiency: By integrating all business processes into a single system,

companies can eliminate redundant tasks and improve productivity.
 Enhanced visibility: ERP systems provide real-time data that can be used to monitor
key performance indicators, such as sales, inventory levels, and customer satisfaction.
 Greater control: ERP systems enable companies to standardize processes and ensure
compliance with regulations and industry standards.
 Improved customer service: ERP systems enable companies to respond quickly to

customer inquiries and provide better customer service.
 Reduced costs: By streamlining processes and eliminating redundant tasks, ERP

systems can help companies reduce costs and improve profitability.
 However, implementing an ERP system can be a complex and time-consuming

process, requiring significant investment in software, hardware, and implementation
services. Additionally, companies must ensure that employees are properly trained to
use the new system and that it is fully integrated with existing processes and systems.
MRP OBJECTIVES
The main objectives of MRP (Material Requirements Planning) are as follows:
 Ensuring materials availability: MRP aims to ensure that the necessary raw
materials, components, and other resources are available in the right
quantity and at the right time to support the production process. This
helps companies to avoid stockouts, which can lead to production delays
and increased costs.
 Optimizing inventory levels: MRP helps companies to manage inventory

levels more efficiently by calculating the precise amount of materials
needed to meet production requirements. This enables companies to
avoid overstocking, which ties up capital and can lead to waste, while also
ensuring that sufficient inventory is available to meet demand.,
 Reducing lead times: MRP helps companies to reduce lead times by

enabling them to plan production and procurement activities more
efficiently. By ensuring that materials and resources are available when
needed, companies can minimize delays and improve productivity.
 Improving production scheduling: MRP helps companies to improve

production scheduling by providing a clear picture of what needs to be
produced and when. This enables companies to optimize production
schedules, minimize setup times, and improve overall efficiency.
 Enhancing overall performance: By optimizing inventory levels, reducing

lead times, and improving production scheduling, MRP helps companies
to enhance overall performance and competitiveness. This can result in
improved customer satisfaction, increased sales, and greater profitability.
 Overall, the objectives of MRP are to improve efficiency, reduce costs, and
enhance performance by ensuring that materials and resources are
available when needed to support the production process.
Master Production Schedule (MPS)
 The Master Production Schedule (MPS) is a plan that specifies the quantity
and timing of the finished products that a company plans to produce over
a specific period. The MPS is a critical input to the Material Requirements
Planning (MRP) process, which determines the materials and resources
required to fulfill the production plan.
 The MPS is typically created based on customer orders, sales forecasts,

and other demand signals. The plan outlines the production quantities of
each finished product and the timing of the production runs. It also takes
into account the capacity of the production facilities and the availability of
resources such as labor, materials, and machinery.
 The MPS serves as a guide for the MRP process, which uses the
production plan to calculate the requirements for raw materials and
components needed to meet the production schedule. By using the MPS
to drive the MRP process, companies can ensure that they have the
necessary materials and resources available when needed to support
production.
 The MPS is updated regularly to reflect changes in demand and

production capacity. Companies may use various forecasting methods,
such as historical data analysis, trend analysis, and market research, to
develop a more accurate MPS. By maintaining an accurate MPS,
companies can improve production planning and scheduling, reduce lead
times, and enhance overall performance.
MRP advantages
There are several advantages to using Material Requirements Planning (MRP) in

manufacturing. Some of the key advantages are:
 Better inventory management: MRP enables companies to manage inventory

levels more efficiently by calculating the precise amount of raw materials,
components, and other resources needed to meet production requirements. This
helps companies avoid overstocking, which can tie up capital and lead to waste,
while also ensuring that sufficient inventory is available to meet demand.
 Improved production planning: MRP provides a clear picture of what needs to be

produced and when, enabling companies to plan production activities more
efficiently. By optimizing production schedules and minimizing setup times,
companies can improve overall efficiency and reduce cost.
 Reduced lead times: By ensuring that materials and resources are available when
needed, MRP helps companies to reduce lead times and improve overall
production efficiency. This can result in faster turnaround times and increased
customer satisfaction.
 Enhanced decision-making: MRP provides real-time data that can be used to

monitor key performance indicators, such as inventory levels, production
schedules, and customer satisfaction. This enables decision-makers to make
informed decisions based on current data, rather than relying on estimates or
assumptions.
 Improved customer service: MRP can help companies respond more quickly to
customer inquiries and provide better customer service by ensuring that products
are available when needed and that production schedules are met.
 Overall, the advantages of MRP are increased efficiency, reduced costs, improved
customer service, and enhanced decision-making. By using MRP to optimize
production planning and inventory management, companies can improve their
competitiveness and achieve greater profitability.
ERP EVOLUTION
The evolution of ERP can be traced back to the early 1960s when businesses
began using computers to automate manual processes. Initially, ERP was
focused on automating back-office functions such as accounting and finance.
However, over time, ERP has evolved to encompass all aspects of business
operations.
In the 1980s, software vendors began developing ERP systems that could
integrate different business functions, such as inventory management,
procurement, and production planning. These systems were designed to work
together seamlessly, allowing companies to automate their operations and
streamline their processes.
In the 1990s, ERP systems became more sophisticated, with new modules for
supply chain management, human resources, and customer relationship
management. These systems provided a comprehensive view of a company's
operations, enabling better decision-making and improving efficiency.
In the early 2000s, ERP systems evolved to include web-based interfaces,

making them more accessible and easier to use. Mobile applications were also
developed, allowing employees to access ERP systems from their smartphones
and tablets.
Today, ERP systems are increasingly cloud-based, enabling companies to

access their data from anywhere and allowing for more scalable and cost-
effective solutions. Additionally, artificial intelligence and machine learning
technologies are being incorporated into ERP systems, allowing companies to
analyze large volumes of data and make more accurate predictions.
Overall, the evolution of ERP has been driven by the need for greater
efficiency, automation, and integration across different business functions. As
technology continues to advance, ERP systems are likely to become even
more sophisticated, providing companies with new ways to optimize their
operations and improve their competitiveness.

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Basics of MRP

MRP stands for Material Requirements Planning. It is a planning and

The MRP process typically involves the following steps:

1. Determining the demand for finished goods based on the MPS

By using an MRP system, companies can reduce inventory costs by ensuring

 Some of the key benefits of ERP systems include:

 Improved efficiency: By integrating all business processes into a single system,

 Improved customer service: ERP systems enable companies to respond quickly to

 Reduced costs: By streamlining processes and eliminating redundant tasks, ERP

 However, implementing an ERP system can be a complex and time-consuming

The main objectives of MRP (Material Requirements Planning) are as follows:

 Optimizing inventory levels: MRP helps companies to manage inventory

 Reducing lead times: MRP helps companies to reduce lead times by

 Improving production scheduling: MRP helps companies to improve

 Enhancing overall performance: By optimizing inventory levels, reducing

 The MPS is typically created based on customer orders, sales forecasts,

 The MPS is updated regularly to reflect changes in demand and

There are several advantages to using Material Requirements Planning (MRP) in

 Better inventory management: MRP enables companies to manage inventory

 Improved production planning: MRP provides a clear picture of what needs to be

 Enhanced decision-making: MRP provides real-time data that can be used to

In the early 2000s, ERP systems evolved to include web-based interfaces,

Today, ERP systems are increasingly cloud-based, enabling companies to

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