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MRP Systems
What is MRP?
Basically, MRP is a calculation method geared toward determining how much of which raw materials are required and roughly when they should be ordered to fulfill a set of product orders. MRP generally consists of four steps:
- Bill of Materials Explosion - looking backward from each product, determine which intermediates and raw materials are required, and in what quantities.
- Netting - compare the above quantities against current inventory.
- Lot Sizing - determine how the needed materials will be purchased or produced.
- Start Date Determination - based on cycle time information, determine when each order should start production.
Is MRP the same as Scheduling?
No. MRP, depending on the implementation, usually generates rough plans of which tasks will be done during a given planning horizon. However, the exact sequence of carrying out the plan, including the allocation of finite resources among the potentially many products, is not generated. Since MRP does not typically analyze the details of carrying out its plan, the feasibility of the plan is not necessarily guaranteed. In particular, capacity may actually be overestimated by an MRP system, which can result in unrealistic production goals. Often, compensation for this deficiency takes the form of adjustments to actual production rates to take into account estimates of lost production time due to finite shared resources, changeovers and breakdowns.
Our Enterprise Wide Manufacturing Data System performs MRP. Why do I need scheduling?
As discussed above, MRP is NOT scheduling. In the best of worlds, MRP would work out all of the operational details to have the most accurate estimate of capacity, and an exact determination of the time at which raw materials must be available. The reason Enterprise Wide Manufacturing Data Systems do not perform this detailed calculation is because scheduling to maximize capacity in the presence of finite resources is a very difficult problem. Solving these problems effectively and efficiently, requires a great deal of expertise, research, and development far beyond that available to most data system vendors. The reason you need scheduling is to precisely know the capacity of your business, and to have the capability to analyze how to improve that capacity. High level MRP based planning models simply are not capable of doing so.
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