The core of production management systems is MRP II (Manufacturing Resource Planning), with MRP I (Material Requirement Planning) at its center. Preparing an accurate MPS (Master Production Schedule) is crucial. The process of generating MPS from orders, creating manufacturing orders with MRP, and generating purchase orders after load leveling is seamlessly executed by APS.
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Production Scheduler in Indonesia
Production planning and load planning are closely related and require verification based on quantities. It is important to compare production quantities,…
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What this article covers
- MRP II is based on MRP I and generates MPS from order orders.
- MPS should be created with the agreement of both the sales and production management departments.
- Lead time is adjusted in days to accommodate regular orders.
- APS automatically generates manufacturing and purchase orders from MPS.
- Lot management creates individual manufacturing orders based on order orders.
Development from MPS to MRP and MRPII
MRP stands for Material Requirement Planning, which plans the procurement of future parts and materials by breaking down products into components and allocating inventory, issued manufacturing orders, and purchase orders to calculate net requirements. The starting point for MRP calculations is the Master Production Schedule (MPS), which is a monthly production plan based on product completion dates.
With pure MRP functionality, it is necessary to prepare the product MPS independently using tools like Excel, and MRP calculates requirements considering inventory allocation and safety stock only for work-in-progress and materials.
Another MRP is Manufacturing Resource Planning, also known as MRP II. It includes the process of generating MPS based on order orders and forecasts before traditional MRP, and extends to creating purchase plans from the material requirements calculated by MRP.
Typically, customer order quantities fluctuate, and using order orders and forecasts as the starting point for MRP calculations, allocating product inventory, and manufacturing only the net requirements of products is applicable only to industries where demand can be somewhat predicted.
Thus, creating MPS by subtracting product inventory from order orders and forecasts, considering minimum inventory, performing component breakdown, calculating requirements, creating manufacturing orders, considering load leveling, allocating resources, issuing manufacturing instructions, and issuing purchase orders based on this is close to MRP II functionality.
The core of business systems (ERP) is MRP II, with MRP I at its core. In MRP II, creating MPS is extremely important, with MPS managing products and MRP managing materials and work-in-progress.
Lead Time Adjustment and Load Leveling
Ideally, MPS is the final product production plan created with the agreement of both the sales department, which emphasizes shipping schedules and forecasts from a customer service perspective, and the production management department (Production Planning and Inventory Control = PPIC), which wants to consider shop floor circumstances.
However, in Indonesia, as observed on the shop floor, MPS is mechanically created from forecasts and shipping schedules received by the production management department from the sales department, with little intervention from the sales department during MPS creation. It is common to see the sales department rushing to the shop floor to follow up when delays in delivery are likely to occur at the time of shipment.
The unit of lead time (Lead Time = L/T) is in days, and by adjusting L/T in days for each process, the timing of issuing manufacturing instructions is calculated. This means "advancing manufacturing L/T by one day regardless of whether the order quantity is one or 1,000." Setting L/T in days means planning for regular orders, not small orders like sample production or occasionally large orders.
When a large order is received, it should be handled by load leveling, such as assigning work to multiple machines in parallel, rather than by MRP. If this cannot be handled, it indicates that the capacity plan is incorrect or that the sales department is taking orders for 100 units against a production capacity of 10 units per day.
The purpose of MRP is to create a gross production plan for manufacturing net requirements during regular production. The production plan created by MRP lead time adjustment is only established with the human effort of shop floor adjustment capabilities and production preparation (capacity planning and sales planning).
When this reaches its limit, production plans and capacity plans become unbalanced, inefficient manufacturing instructions are issued from MRP, unnecessary overtime or holiday work occurs despite sufficient production capacity, and intermediate inventory stagnates.
To solve this problem, the introduction of Advanced Planning and Scheduling (APS) without setting time buckets and with finite capacity is considered.
MRP and Lot Management
First, based on the forecasts prepared by the sales department, the production management department creates a daily MPS while considering equipment capacity. At this time, if products with small order quantities are evenly distributed daily, setup time increases, so adjustments are made to concentrate production at the beginning of the week or month.
By running MRP, requirement expansion is performed, and net requirements are calculated, creating manufacturing orders without considering resource capacity, while simultaneously calculating the monthly required operating time for manufacturing final products or work-in-progress.
When generating manufacturing orders, lot consolidation is not performed, and manufacturing orders are created only for the necessary quantity from order orders, with linkage, which is lot management. MRP and lot management differ significantly in whether lot consolidation is performed in the manufacturing process. Despite being treated as opposing concepts in specialized books, the term "MRP compatible with lot management" is used in systems.
APS's MRP Functionality
In ERP systems, after running MRP, resource allocation work (scheduling) is performed while considering load leveling for manufacturing orders. By running MRP again for material procurement, a purchase plan can be established to receive materials at the timing necessary for manufacturing. APS automates this process, allowing manufacturing orders and purchase orders to be output from MPS at once. In production schedulers with APS functionality, the process from MPS generation onwards is fully automated.
Frequently Asked Questions | MRP and APS
Common questions when moving from requirement planning to scheduling.
Why is MRP alone insufficient?
MRP focuses on requirement expansion, and there are situations where it cannot fully break down equipment's finite capacity and setup over time. APS supplements with allocation considering constraints, load leveling, and delivery visibility.
How do lot management and MRP relate?
Lot management is a framework for tracking flow by project, while MRP is requirement expansion from demand. It is important not to confuse the two and to design the granularity of planning and the linkage of results.
How is APS's MRP functionality positioned?
Schedulers can have processing close to requirement expansion, but the role generally leans towards equipment allocation and constraint fulfillment. It receives MRP output as input and translates it into shop floor execution plans.