A Basic Understanding of MRP

1. A Basic Understanding of MRP In a purchasing environment.

2. APICS definition of “MRP” Materials Requirements Planning A set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate requirements for materials. It makes recommendations to release replenishment orders for material. Further, because it is time-phased, it makes recommendations to re-schedule open orders when due dates and need dates are not in phase. Time-phased MRP is accomplished by exploding the bill of material, adjusting for inventory quantities on hand or on order, and offsetting the net requirements by the appropriate lead times.

3. Single Level Bill of Material A structure containing a direct parent – child relationship. It shows a relationship only one level down. “A” is considered the End Item or Parent in a Single Level Bill. A B C

4. Multi-level Bill of Material A display of all components directly or indirectly used in a parent. A series of single level bills chained together. A B C Type: M Type: P D E H

5. Let’s look at QAD at different types of Product Structures! Parent Child How much of the child goes into the parent?

6. Where Used Inquiry A Where-Used inquiry identifies every parent item which calls for a given component, and the respective quantity required. This information is extracted from the bill of material file. 13.7 MFG/PRO Menu.

7. BOM Accuracy APICS states for a class “A” MRP System: 98% 98% of all Bills of Materials contains no errors.

8. Purchased Component Item Master 1.4.7 is a used in a single site database. 1.4.17 is a used in a multiple site database.

9. Item’s ordering parameters for Let’s look at 1.4.7 and discuss these fields

10. MRP runs why and when? • Material Requirements Planning (MRP) is the means for balancing supply and demand for purchased and manufactured items in a time-phased manner. • MRP is usually run on a regular basis, often daily. It reviews all sources of demand. • MRP is performed by site. When it plans materials for one site, that site's material plan is completely independent from inventory, demand, and supply in other sites. • The primary output of MRP is planned orders and action messages. These are generated whenever MRP detects an imbalance of supply and demand.

11. There are different ways to run MRP, what’s the difference between them? • Net-Change Materials Plan (23.1) • Regenerate Materials Plan (23.2) • Selective Materials Plan (23.3)

12. Net Change Net Change Materials Plan and Regenerate Materials Plan items based on low-level code, generating requirements at the top level first, then down through the structure one level at a time. Net Change only plans items to where the MRP required flag is set to YES, in 1.4.7 or 1.4.17

13. Regenerate You should always schedule periodic full regenerative MRP runs into your routine, even if you primarily use Net Change Materials Plan. Net Change Materials Plan operates on items based on inventory transactions, changes to product structures, and other system inputs. It does not see demand or forecast for items moving into the MRP horizon as time passes. Normally ran weekly dependant on activity. It can be ran nightly if needed. Plans regardless of the MRP required flag setting.

14. Selective Selective Materials Plan plans only the items selected, passing down gross requirements to the next unselected level, but not re-planning orders for that level. Selective Materials Plan plans orders based on selection criteria of group, type, planner, etc.

15. Lets take a look at a MRP detail inquiry screen. • 23.13 MRP Summary Inquiry. • 23.16 MRP Detail Inquiry. 2 screens heavily used by planners in a MRP environment.