Below includes the major points of MRP and ERP systems for managing dependent demand inventory.
An MRP system is an information system used to plan and control manufacturing of dependent-demand inventory items. There are three types of MRP systems: type I, an inventory control system (order launching); type II, a production and inventory control system (closed loop); and the third type an enterprise resource planning system. Each of these systems expands the scope and se of MRP.
The parts-explosion process has three principal inputs: master schedule, BOM, and inventory record. There are two principal outputs: purchase orders and shop orders Parts explosion is the heart of the MRP system.
An MRP system follows a requirements philosophy-parts are ordered only as required by the master schedule. Past demand for parts is irrelevant, and component inventories are not replenished when they reach a low level.
Master schedules should be based on both marketing and production considerations. They should represent a realistic build plan within factory capacity. Top management should use the S&OP and master schedule to plan and control the business through a cross-functional planning team.
The BOM contains the list of parts used to make the product. To maintain the accuracy of the bill of materials, an engineering-change-order system is needed.
The accuracy of the inventory record system should be maintained through cycle counting. Daily cycle counting can be used in place of annual physical inventories.
Shop-floor control is used to control the flow of materials through the factory. This is done by managing lead times dynamically as the product is manufactured. If lead times are properly managed, much safety stock can be eliminated.
A successful MRP system requires (1) implementation planning, (2) adequate computer support, (3) accurate data, (4) management support, and (5) user knowledge. Both system and people problems must be solved to use MRP successfully. When this is done, benefits include reduced inventory, increased customer service, and improved efficiency.
All manufacturing and service firms can benefit from MRP if it is properly installed and operated. This includes large and small firms and all industries.
Enterprise resource planning systems integrate a basic MRP system with information from marketing, dales, finance/accounting, and human resources through a common database. ERP systems can be the basis for cross-functional and supply chain integration.
Please outline these major points