MRP was first introduced in the late 1950’s early 1960s, depending on what source you look at. Material Requirements Planning (MRP) was the wave of the future. A company by the name of J.I. Case, a manufacturer of tractor and construction machinery, worked with IBM to develop what is widely accepted as the first MRP system. This era was marked with widespread implementation of software and computers that were needed to run the software. Every major business raced to implement MRP. It’s no secret that companies want to balance supply with demand. They don’t want to tie up cash and they don’t want to stock out of inventory. While we are not advocates of forecasting, Author, Joseph Orlicky put it best in his book: Material Requirements Planning (MRP): The New Way of Life in Production and Inventory Management when he said "Never forecast what you can calculate." MRP is a tool that helps users do just that, calculate what they need to build, as well as when they need to build it. So, what is MRP?
Material requirements planning (MRP) is a planning and control system that is used to assist in the management of inventory, production and scheduling. MRP uses a set of techniques that converts the master schedule into a detailed schedule, so that you can purchase or build raw materials, subassemblies and components. MRP uses the bill of material data, inventory data and the master production schedule to calculate the requirements that you need. One added benefit of material requirements planning is its unique ability to time phase your requirements. Time phasing gives MRP the power to recommend when you should release orders for materials. In addition to this, MRP will provide you with codes, exception messages or recommendations that can help a planner know when to reschedule orders based on need dates and required dates. The time phasing process starts with the independent demand items that are listed in the Master Production Schedule and then calculates two critical pieces of information:
References: Challenge
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April 2024
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