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MRP made easy.

MRP (Material Requirements Planning) An information system that determines what assemblies must be built and what materials must be procured in order to build a unit of equipment by a certain date.  made easy What every metal-products manufacturer should know about PC-based material requirements planning (application) Material Requirements Planning - (MRP) A system for effectively managing material requirements in a manufacturing process.

Information systems have long been an important part of the manufacturing environment.

The term MRP--it stands for material requirements planning--strikes fear and loathing fear and loathing - (Hunter S. Thompson) A state inspired by the prospect of dealing with certain real-world systems and standards that are totally brain-damaged but ubiquitous - Intel 8086s, COBOL, EBCDIC, or any IBM machine except the Rios (also known as the RS/6000).  in the hearts of uninitiated un·in·i·ti·at·ed  
Not knowledgeable or skilled; inexperienced.

An uninformed, unskilled, or inexperienced person or group of people.
 manufacturers everywhere. Whether or not you've ever used an MRP system, there are several things you think you know for sure about MRP:

. It's more complicated than calculus calculus, branch of mathematics that studies continuously changing quantities. The calculus is characterized by the use of infinite processes, involving passage to a limit—the notion of tending toward, or approaching, an ultimate value.  or brain surgery.

. It will take 12 to 18 months to implement, and then nine times out of ten, it will fail to live up to expectations.

. It will cost your company between $20,000 and $500,000.

If your company is like over 90 percent of manufacturers in America (i.e., with annual sales under $10 million), you probably believe that MRP is out of the question, because it is too costly, too time-consuming, and too complex.

Having spent many years working with manufacturing systems of all shapes and sizes, however, I've come to a startling star·tle  
v. star·tled, star·tling, star·tles
1. To cause to make a quick involuntary movement or start.

2. To alarm, frighten, or surprise suddenly. See Synonyms at frighten.
 conclusion: MRP is simple! Most of MRP's apparent complexity derives from the way the software is written, and especially from the manner in which MRP is presented to potential users. But the fundamentals of MRP are known intuitively to every small manufacturer.

For example, let's take an imaginary Mr Jones, who owns the $5-million Widget Pronounced "wih-jit," for decades, the term has been a popular word for a generic "thing" when there is no real name for it. It is often used to describe examples of made-up products along with other fictitious names; for example, "10 widgets, 5 frabbits and 2 dingits.  Mfg Co. He's convinced that MRP is far beyond his capabilities. But just listen to how he responds when I ask him this question: "If I order 500 of your widgets today, could you deliver them in eight weeks?"

After some hemming and hawing speaking hesitantly and inarticulately, with numerous pauses and interjections.

See also: Haw
, the answer comes back, "Yes. In fact, I could deliver them in seven weeks."

"And how did you come to that conclusion?" I ask.

"Well," replies Jones, "I've got 200 on hand, so I still need to make 300. They'll take about a week to build. But I haven't got enough subassemblies to make 300 widgets, so I need to make some of them, and they take about two weeks.

"Today, I'll order components that take about four weeks to get before I can build the subassemblies. So altogether, it will about seven weeks to complete the order."

Without knowing it, Jones has just performed MRP. He has subtracted his on-hand quantity from his order quantity. He has mentally exploded his bill of materials The list of components that make up a system. For example, a bill of materials for a house would include the cement block, lumber, shingles, doors, windows, plumbing, electric, heating and so on.  (BOM) for the 300 he still needs to build. In addition, he has added lead-times for manufacturing and purchasing of raw materials, and come up with a total lead-time for the entire job. And he has determined rough dates for ordering raw materials and starting work orders, for building both the subassemblies and final assemblies.

Unfortunately, his mental calculations often are only rough approximations, and they're likely to contain errors. This is especially true if he's thinking about 40 orders for 17 different products having many common components. Nevertheless, like almost all other small manufacturers, Jones comprehends the principles of MRP, and in fact uses them every day without knowing it.

Answers four questions

Boiled down to its essentials, MRP is a methodology for answering four questions:

1. What do I have to make?

2. When should I make it?

3. What do I need to buy?

4. When should I buy it?

The more quickly, easily, inexpensively, and accurately you can get answers to these four basic MRP questions, the more successful you'll be. This is where a PC-based MRP system comes in.

At the heart of a computer-based MRP system is the calculation program. First, this program looks at all demands in the system: Sales orders The sales order, sometimes abbreviated as SO, is an order received by a business from a customer. A sales order may be for products and/or services. Given the wide variety of businesses, this means that the orders can be fulfilled in several ways. , forecasts for finished goods, independent demands from engineering, warranty, service, and so on.

The the program takes into account when each demand is scheduled, and how due-dates are spread out over time. (In MRP jargon, this is called "time-phasing".) These demands can be for components, subassemblies, spare-parts kits, and the like.

Next, the calculate program looks at supplies against those demands: On-hand raw materials and finished goods, work-in-process, open purchase orders, planned work orders, and so on. The program then considers the dates on which these supplies are due.

The calculate program knows (just as Jones knows) that merely having enough supplies available to meet demand is not enough. To be useful as supplies, they must be available on or before the date they are needed by demand.

So, the calculate program matches demand with available supplies over time, and comes up with a list of what Jones needs to make and buy. The program also determines when these make or buy activities must take place.

Reports that display results of these calculations have many different names. For the sake of simplicity, I call them the make report and buy report. They tell you, every day, whether or not you need to take an action--that is, begin making something, or place an order to buy something. These actions are required to create supplies that satisfy your time-phased schedule of demands.

The BOM, incidentally, is a cornerstone of the MRP process. When the calculate program determines that there is an independent, unsatisfied demand for a widget, the program uses a BOM to determine which subassemblies need to be manufactured and which components need to be procured.

The WDG-000 is composed of six COMP-1s (pieces of smoked glass), two SA-1 subassemblies (black boxes), and one SA-2 subassembly sub·as·sem·bly  
n. pl. sub·as·sem·blies
An assembled unit forming a component to be incorporated into a larger assembly.

 (white box). The SA-1, in turn, is composed of six mirrors (COMP-2), 10 gear sets (COMP-3), and 100 pieces of wire (COMP-4). The SA-2 has just one component, gear sets (COMP-3).

Six gear sets are required for each widget. On the BOM report, the quantities of components in the SA-1 are doubled, because it takes two SA-1s to make a widget.


Now the order for 500 widgets, due on July 1, 1989, is entered into your MRP system. (In this case, we're using E-Z-MRP from C R Smolin Inc.) The calculate program is then run, and it does precisely and accurately in about four seconds what it took Jones over a minute to approximate in his head.

To answer the four basic MRP questions listed earlier, we look at the MRP make schedule, and the MRP buy schedule. These should reveal all actions that Jones must perform to deliver our 500 finished widgets.

Referring to the make schedule, we see that the last item on the report is the widget, part number WDG-000. Reading across, we see that lead-time in working days is five (under the column headed "Lead"). There are 200 of these jewels on hand (under the column headed "QOH').

The next line shows the demand from Smolin for 500 widgets, being supplied partially from inventory. This leaves a quantity remaining (under the column headed "Qty Rem") of -300. This -300 is what generates the ** Action ** message at the far right-hand side right-hand side nderecha

right-hand side right nrechte Seite f

right-hand side nlato destro 
 of the report. This message tells Jones he needs to take action to create a supply for the unmet demand.

Since the due date is July 1, and the lead time is five working days (the system automatically skips weekends), Jones must open a work order for 300 more widgets on June 26 (under the left-hand column headed "Order By").

Of course, a requirement to build 300 widgets means that Jones will need 300 SA-2s and 600 SA-1s (two SA-1s per widget). Further, these parts must be on hand by June 25 if he is to start building widgets on June 26.

Actually, since June 25 is a Sunday, and the 24th is a Saturday, these parts need to be in stock by the end of Friday, June 23. (E-Z-MRP, like most MRP systems, has an internal calendar. This tells the system which days are working days and which are non-working days, holidays, weekends, and the like.)

If you look on the MRP make schedule, at data for the SA-1 and SA-2, you see that 600 and 300, respectively, are required. Since these parts have a lead-time of 10 working days, Jones must order them to be built starting on June 12 if they are to be finished by June 23.

The MRP buy schedule, shows the corresponding information for all the "buy" parts Jones needs to build the 300 widgets. This schedule shows quantities on hand and quantities short, the dates on which they are needed, and--given lead-times required to procure To cause something to happen; to find and obtain something or someone.

Procure refers to commencing a proceeding; bringing about a result; persuading, inducing, or causing a person to do a particular act; obtaining possession or control over an item; or making a person
 these parts--the order dates for purchasing.

For example, the shortage of 5500 COMP-4s (the wires), as shown on the last line of the buy schedule, is required for the 550 SA-1 shortage on the make schedule. These wires need to be in stock no later than Friday, June 9, if the work order for the SA-1s is to begin per the make schedule on Monday, June 12.

COMP-3 on the buy schedule shows a consolidated demand of 7300 gear sets. There are 5500 for the 550 SA-1s (10 gear sets per SA-1), and 1800 gear sets for the 300 SA-2s (six gear sets per SA-2).

The make schedule is routed to production control, and the buy schedule to purchasing. Work orders are scheduled by production control, and purchase orders are placed by purchasing. Then everything is fed back into the MRP manufacturing database.

The next time the calculate program is run, the make and buy schedules will have no action (** Action **) items. All demands for all parts will be satisfied by scheduled orders.

Mimics us

As you can see, a computer-based MRP system simply mimics (albeit more quickly and accurately) what humans in almost every manufacturing company are struggling to do daily. There are no arcane ar·cane  
Known or understood by only a few: arcane economic theories. See Synonyms at mysterious.

[Latin arc
 or hidden processes, no sophisticated algorithms. Nor is higher math involved--just addition and subtraction subtraction, fundamental operation of arithmetic; the inverse of addition. If a and b are real numbers (see number), then the number ab is that number (called the difference) which when added to b (the subtractor) equals , and counting days on a calendar.

So why doesn't Jones have an MRP system? The problem is not with his knowledge or capabilities. Rather, the problem lies with the software he is normally forced to use to get these answers.

Technical complexity and high prices for MRP are unnecessary today for the small manufacturer. If you can't understand the entire system from the demo package and manual, don't buy it.

What's more, don't get caught up in all the modules many software people want you to buy. Figure out exactly what you need; chances are, you can do nicely without accounting functions and many other fancy modules that only complicate com·pli·cate  
tr. & intr.v. com·pli·cat·ed, com·pli·cat·ing, com·pli·cates
1. To make or become complex or perplexing.

2. To twist or become twisted together.

 your MRP system and inflate inflate - deflate  its price.

If you've been intimidated in·tim·i·date  
tr.v. in·tim·i·dat·ed, in·tim·i·dat·ing, in·tim·i·dates
1. To make timid; fill with fear.

2. To coerce or inhibit by or as if by threats.
 by MRP's cost and complexity, I urge you to take a fresh look at PC-based systems. You'll be pleasantly surprised.

PHOTO : 1. At Precision Metal Products Inc (PMP See point-to-multipoint and portable media player.

PMP - Portable Media Player
), El Cajon El Cajon (ĕl kähōn`), city (1990 pop. 88,693), San Diego co., S Calif.; inc. 1912. Electronic equipment, aircraft parts, irrigation equipment, furniture, and men's suits are among its manufactures. , CA, an operator inserts a titanium titanium (tītā`nēəm, tĭ–) [from Titan], metallic chemical element; symbol Ti; at. no. 22; at. wt. 47.88; m.p. 1,675°C;; b.p. 3,260°C;; sp. gr. 4.54 at 20°C;; valence +2, +3, or +4.  

PHOTO : preformed part into an impact forging machine. To keep track of die maintenance and

PHOTO : inventories, the company installed a PC-based MRP package called E-Z-MRP from C R Smolin

PHOTO : Inc, La Jolla La Jolla (lə hoi`yə), on the Pacific Ocean, S Calif., an uninc. district within the confines of San Diego; founded 1869. The beautiful ocean beaches, in particular La Jolla shores and Black's Beach, and sea-washed caves attract visitors and , CA. PMP's package includes modules for bill of materials, material

PHOTO : requirements planning, capacity requirements planning, and batch processing (1) Performing a particular operation automatically on a group of files all at once rather than manually opening, editing and saving one file at a time. For example, graphics software that converts a selection of images from one format to another would be a batch processing utility. . Hardware in

PHOTO : PMP's system consists of an IBM (International Business Machines Corporation, Armonk, NY, The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries)  PC/XT PC/XT Personal Computer/Extended Technology (IBM)  with 20 MB hard disk, and an Epson Fx-100 dot-matrix

PHOTO : printer. Amongh other tasks, E-Z-MRP calculates how many more forgings a die set can make

PHOTO : before it needs, refurbishing. According to according to
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

 Jerry Hoaglund, PMP's production control

PHOTO : manager, "the MRP system has given us significant savings in both time and money."
COPYRIGHT 1989 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Title Annotation:microcomputer materials requirements planning
Author:Smolin, Rocky
Publication:Tooling & Production
Date:Jul 1, 1989
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