Production Resources Planning (MRP II)
Requirement planning operations were called MRP at first since they were focused only on materials. Then, capacity planning began with the addition of labor and machinery requirements. Consequently, the scope of MRP has been expanded from material requirements planning to production resources planning. Production resources planning is a management information system where production decisions are considered as inputs and related results can be reported.
Master Production Schedule (MPS)
In the production resource planning system, planning functions begin with the Master Production Scheduling operation. MPS is a schedule used to display procurement dates and quantities of materials to be sold or produced in accordance with a specified planning strategy. The inputs of the Master Production Schedule are sales orders, estimates and inventory status. Once MPS is generated, the sufficiency of available resources is examined through capacity planning to realize the planned production.
Material Requirement Planning (MRP)
MRP is used to produce materials listed on the Master Production Schedule on time and in required quantities, and to determine the time required to purchase or produce necessary inputs. The inputs of MRP are Master Production Schedule, inventory status, product structure, planned inputs, planned outputs, outstanding purchase orders and any outstanding orders consisting of sales orders. Proposal purchase orders and production orders are generated at the end of the MRP process.
MRP determines material requirements according to the demand for materials for which it will be used as an input. Output requirements are also included in MPS. Materials used in production, required quantities and related lead times are determined using the product structure information. MRP is used to determine net requirement by processing actual material quantity and outstanding orders. Purchase proposals or production orders are generated using the Lot Size Method.
Rough Cut Capacity Check (RCC)
The MPS application should be reliable about the sufficiency of capacity. RCC is a tool used to control sufficiency of important MPS capacities. The evaluation is based on the capacity requirement matrix. The parameters of this matrix consist of critical capacities that need to be controlled (generally bottlenecks) and inputs listed in MPS. Planned capacity requirement is compared with actual capacity in order to produce all necessary products. In insufficient capacity cases, orders are shifted to an earlier or later date, or an additional capacity is created. There is no need to control all Workstations in RCC. Only Workstations and Employees with high levels of occupation are subject to control.
Capacity Requirement Planning (CRP)
CRP is used to control whether actual capacity is exceeded or not when Production Orders generated through MRP are applied. The inputs of CRP are Production Orders generated through MRP and route information. Analysis to eliminate capacity constraints like backdating or postdating orders can be performed in CRP.
CRP distributes work orders generated by MRP to Workstations. CRP generates a capacity load chart used to compare actual capacity with labor and machinery work hours required for the planned workload. CRP only displays the results of the plan, and does not change priorities.
Production Control
Once resource and material planning is completed, execution activities can be started using the Production Control and Purchase sections. The Production Control section is used to track actual productions and to generate related cost data. Starting, updating and tracking orders are the main functions of the Production Control section. The Production Control section is supported by Cost Accounting. The Production Order is used as the main control tool. Planned and actual production information is tracked by Production Orders.
Production Systems
Vendors are divided in three classes by their scheduling methods:
Make To Stock: Customer orders are delivered by finished goods that are already produced and stocked. In such cases, demand is based on forecasts. Production starts without definite demand information.
Make To Order: Production planning functions are more complicated since different products are produced for each customer. Master Production Schedule is based on actual orders. Production is regularly monitored to compare actual and planned production and to respond to customer questions.
Assemble To Order: This is a combination of the systems mentioned above. If a few stable subassemblies can be used in multiple products, the Master Production Schedule is generated for these subassemblies. The final assembly is done upon order.
BOM Explosion / Implosion
BOM Explosion is the process of calculation of all components in a product structure from the top-level item. The opposite process is called Implosion, and is used to trace components upward.
Phantom Bill of Material
Phantom Bills of Material are used for non-stocked items. Planned orders are not issued for such items, and related assembly process is defined as "phantom". This expression is used for items produced for and used in the routing of Finished Goods, and that do not require stocking. In the MRP system the phantom phase is skipped, and requirements for sub level items are determined. In the LOGO application, the term "Pseudo Semi Finished Good" is used for this concept. (Pseudo Bill of Material)
Alternative Usage in Product Structure
Alternatives can be used in three different ways:
Use Only One Type of Material: Used to specify that all materials will be delivered using a single type of alternative, and not only the outstanding quantity.
Use Only One Type of Alternative: Used to specify that the outstanding quantity will be delivered using a single type of alternative.
All: Indicates that multiple alternatives can be used to deliver the outstanding quantity depending on the Priority and Physical Inventory status on record.
Material Procurement
The Material Procurement option is located in the right mouse button menu of the Production Orders window when production order status is Not Started or Work in Process. The Material Procurement window accessed by selecting the Material Procurement option contains the following fields selected on the Production Order:
- Production Order Number
- Date
- Planned Start Date
- Planned End Date
- Product Code
- Product Quantity
- Product Unit
- Plant
- Division
These fields are informative only, cannot be modified.
Required Materials
The following information can be recorded through the material procurement window.
Date: Date information received from the Planned Material Slip is transferred into this field.
Hour: Hour information received from the Planned Material Slip is transferred into this field.
Work Order Number: The number of the Work Order used by the material on the line as an Input.
Material Code / Material Description: Code and description of the related material.
Warehouse: Warehouse information specified on the Production Order line.
Unit: The unit used on Production Order line.
Gross Requirement: The requirement quantity calculated using the quantity entered on the Production Order.
Fulfilled From Stock: The presence and quantities of materials in the Warehouse on planned slips are controlled for each material. If materials are present and quantity is less than required, the total Warehouse quantity is transferred into this column, while the requirement quantity is transferred into this column if warehouse material total is more than required. In both cases, Fulfilling From Stock option is available in the right mouse button menu while the cursor is on the material line. Fulfilling From Stock is calculated using the following formula:
Quantity to Be Fulfilled From Stock = Physical Inventory – Planned Outputs
Controls to be performed when quantity to be fulfilled from stock is less than gross requirement are:
The Alternative Material Usage parameter is checked in the Production Order lines of information displayed on the Fulfilling from Stock window. In case of alternative material usage, first the presence, and then the warehouse status of alternative materials is checked. In case of alternative material usage due to lack of materials, the Planned Material Slips generated for materials delivered using alternatives should be updated for each alternative material.
If alternative materials are not sufficient, the next parameter to be checked is the Consignment Usage located on Production Order lines. Consignment quantities in related warehouses are controlled if this parameter is checked.
In addition to these operations, the Divisible parameter in the unit sets of related materials is also checked. When requirement quantity is decimal and if Divisible option is checked, the decimal value of the requirement quantity is transferred into the related column of the Material Procurement window. If the Divisible parameter in unit sets is not checked, the integer part of the decimal Quantity information is transferred into this column.
The columns and functions of the Fulfilling From Stock window are:
Alternative: The parameter contains Yes and No options. Indicates whether the material on the line is an Alternative material or not.
Material Code and Material Description: Used to display the code and description of the material for which Fulfilling From Stock option is selected on the Material Procurement window. The code and description of alternative material is displayed if the selected line is the Alternative of the required material.
Material Quantity (Consignment): Indicates the consignment quantity used to deliver requirements.
Unit: Displays the Main Unit if the material on the line is an Alternative material or the Unit on the slip if it is not.
Alternative Material Quantity: Indicates the alternative material quantity used to deliver requirements.
Alternative Material Quantity (Consignment): Indicates the alternative material (consignment) quantity used to deliver requirements.
Material Quantity: Indicates the number of main materials constituting the alternative if the material on the line is an Alternative material, or the material quantity if it is not.
Net Requirement: Used to display the difference between Gross Requirement and Fulfilled from Stock columns. The whole line is displayed in red if the difference is greater than zero, or in green if equal to zero. Green means that procurement through Warehouse, Order or Production Order is not required for material delivery.
Fulfilled by Procurement: In case of a difference between the Gross Requirement and Fulfilled from Stock columns, the difference is transferred into the Fulfilled by Procurement column. In this case; the Warehouse, Order or Production Order shall be generated to procure materials.
LOGO application checks different warehouses related to the plant specified on the Production Order, and records information related to the generated Warehouse Slip at the bottom line of window if the material is found in another warehouse. Data can be modified on this window if necessary.
Deficit: Any deficit materials still present after fulfilling from stock and procurement operations are displayed on this column.