Material Requirement Planning (MRP)

Material Requirement Planning uses computers for scheduling the deliveries of material and parts that are close to the time they are needed. (2) This is a top down system that starts with an annual sales forecast.

 The main function of a material requirement planning system is to control inventory levels, delegate operating priorities for items, and plan capacity to load the production system. The main goal of material requirement planning is to get the proper materials to the proper place at the proper time.  The objective is to improve customer service, minimize inventory investment and maximize production-operating efficiency. These are some material requirement planning advantages and disadvantages to consider.

 Advantages :

• Ability to price more competitively
• Reduced sales
• Reduced inventory
• Better customer service
• Better response to market demands
• Ability to change the master schedule
• Reduced set-up and tear-down costs
• Reduced idle time
• Gives advance notice so that managers can see the planned schedule before actual release orders
• Delays or cancels orders
• Changes order quantities
• Advances or delays for order due dates
• Aids capacity planning

Disadvantages :
 

• Lack of top management commitment failure to recognize that materiel requirement planning is only a software tool that needs to be used correctly
• Intensive executive education is needed
• Perceived as a complete and stand-alone system to run a firm
• Needs a high degree of accuracy for operation
• Too rigid
• Difficult to get away from the schedule once it has been developed 

 Pro-Model

Pro-Model simulation will let production planners evaluate possible combinations of orders and plan for the right lead times. (3) The Pro-Model helps large customers who need Just-in-Time deliveries, which helps their suppliers organize production capacity with their needs. Purchasing organizations use Pro-Model to smooth production flows, which is very important to a Just-in-Time system.

Using a Pro-Model, you can model the scheduling policy changes that will happen when moving to a Just-in-Time system.  Analyzing the model will indicate the factors that a person will need to consider in making such a transition.  In addition, the model will serve as a valuable educational tool in training the workers on the monumental cultural changes, which are required to move to a Just-in-Time philosophy.

“Pro-Model Optimization Suite is a simulation-based software tool for evaluating, planning or re-designing manufacturing, warehousing and logistics systems. This easy to use tool allows you to build a computer representation of a system and test it in a variety of scenarios to provide a person with the best solution. The animation and graphical output reports are powerful tools for visualizing and understanding the behavior of a system.

Typical applications of Pro-Model include: 
  
              *  Implementation of lean manufacturing

              *  Cycle-time reduction 

              *  Equipment investment decisions

              *  Throughput & Capacity analysis 

              *  Identifying and minimizing bottlenecks

              *  Resource allocation

TQM

Just-in-Time inventory management has been developed together with Total Quality Management (TQM). (4) Automobile manufacturers were in a group of the first domestic firms to move towards Just-in-Time system. GM went from keeping a ten-day supply of seats to other parts to ordering 4 to 8 hours in advance. (5) Smaller firms can benefit from a Just-in-Time system. In fact, smaller firms are in a better position than large firms are, because smaller firms can redefine job functions and educate people easier.