5 page paper

MGMT 365 Enterprise Resource Planning

Dr. Z. Radovilsky

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Why Use MRP?

“Material Requirements Planning (MRP) has become a centerpiece for all manufacturing and service systems. Without MRP, we would be totally out of control. It's not a theory - it's the real world”

Al Sondern, Corporate Vice President, Halmark Card, Inc.

“MRP is perhaps the most significant contribution to production and distribution systems… ”

William R. Wassweiler, an industry specialist

Service and manufacturing companies with sales of grater than $10 million are likely to utilize computerized MRP systems

MGMT 365 Enterprise Resource Planning

Dr. Z. Radovilsky

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Why Use MRP? (Continued)

Corning, Inc.

Before MRP, only 50 percent of its orders were being delivered on time

After MRP implementation, the company:

reduced inventory by approximately 10%

climbed inventory accuracy from 69 to 86 percent,

improved delivery schedules from 50 to 90 percent

SC Corporation, the world's largest producer of evaporative coolers

After two years of MRP implementation, inventory decreased so dramatically that plant could build the new line, doubled its production, and increased profit fivefold 

MRP was applied to plan the NASA's space shuttle missions

To handle the extensive resource demand of each launch, it had design a Flight Operations Planning Schedule (FOPS) which was exactly the same as MRP

MGMT 365 Enterprise Resource Planning

Dr. Z. Radovilsky

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MRP: Definition and Main Objectives

MRP is a computer based system that determines what final products the firm will make for future periods, and then it specifies production of needed inputs to make those products

The system identifies

Schedules of specific parts and materials and their amounts required to produce end items

Dates when orders for the materials should be released and received

MRP slogan

Getting the right materials in the right place at the right time

“Getting the right quantities at the wrong time does not accomplish anything”

Main objectives of MRP

Improve customer satisfaction

Reduce inventory investment

Improve plant operations efficiency

MGMT 365 Enterprise Resource Planning

Dr. Z. Radovilsky

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MRP in Enterprise Resource Management

Master Demand Schedule (MDS)

Master Production Schedule (MPS)

Material Requirements Planning (MRP)

Capacity Requirements Planning (CRP)