Lecture 32 - Revision. The contents of this chapter include all of the following: Material requirement planning, nature of demand, inputs to MRP, bill of material, planned orders, net requirement plan, MRP and JIT, lot sizing techniques, maintenance and reliability, reliability, product failure rate, providing redundancy, maintenance cost, total productive maintenance.
Lecture 32 Revision: Material Requirement Planning Maintenance and Reliability Books • Introduction to Materials Management, Sixth Edition, J. R. Tony Arnold, P.E., CFPIM, CIRM, Fleming College, Emeritus, Stephen N. Chapman, Ph.D., CFPIM, North Carolina State University, Lloyd M. Clive, P.E., CFPIM, Fleming College • Operations Management for Competitive Advantage, 11th Edition, by Chase, Jacobs, and Aquilano, 2005, N.Y.: McGrawHill/Irwin • Operations Management, 11/E, Jay Heizer, Texas Lutheran University, Barry Render, Graduate School of Business, Rollins College, Prentice Hall Objectives • • • • • • • • • • • • • • Material Requirement Planning Nature of Demand Inputs to MRP Bill of Material Planned Orders Net requirement plan MRP and JIT Lot sizing techniques Maintenance and reliability Reliability Product failure rate Providing redundancy Maintenance cost Total productive maintenance Material Requirement Planning Material Requirements Planning • • • Material Requirements Planning is a system to calculate requirements for dependent demand items It establishes a schedule (priority plan) showing the components required at each level of the assembly and, based on lead times, calculates the time when these components will be needed It is a system to avoid missing parts for the end item Material Requirements Planning Process • We need to determine – – – • What to order How much to order When to order This will involve – – – – Lead times Bills of material Inventory Status Planning data Nature of Demand • Two Types of Demand – Independent • • – Is not related to the demand for any other product and must be forecast Master production schedule (MPS) items are independent demand items Dependent • • Is directly related to other items or end items Such demand should be calculated and need not and should not be forecast Nature of Demand Independent Demand (Forecast) Table Legs (4) Ends (2) Sides (2) Item #206 Item #433 Item #711 Top (1) Item #025 Hardware Dependent Demand Kit (1) (Calculated) Item #822 If you have an order for 23 Tables, what components would you need to produce them? Objectives of MRP • Two Major Objectives – Determine Requirements • • • • – What to order How much to order When to order When to schedule delivery Keep Priorities Current • It must be able to add and delete, expedite, delay, and change orders based upon present priorities Linkages with Other Manufacturing Planning and Control Functions Business Plan Production Plan Planning MPS MRP PC and Purchasing The MRP is driven by the MPS; it is concerned with the components needed to make the end items • The MRP in turn drives, or is input to, production control (PC) and purchasing • Execution Inputs to the MRP System • MPS Inventory Status MRP Four Major Inputs: – Bill of Material – – – Planning Data MasterProduction Schedule InventoryRecords PlanningData BillsofMaterial Maintenance ỵ Two types of maintenance Preventive maintenance – routine inspection and servicing to keep facilities in good repair ỵ Breakdown maintenance emergency or priority repairs on failed equipment ỵ ImplementingPreventiveMaintenance Need to know when a system requires service or is likely to fail þ High initial failure rates are known as infant mortality þ Once a product settles in, MTBF generally follows a normal distribution ỵ Good reporting and record keeping can aid the decision on when preventive maintenance should be performed ỵ Computerized Maintenance System Data Files Output Reports Equipment file with parts list Inventory and purchasing reports Equipment parts list Maintenance and work order schedule Equipment history reports Repair history file Inventory of spare parts Personnel data with skills, wages, etc Data entry – Work requests – Purchase requests – Time reporting – Contract work Cost analysis (Actual vs standard) Work orders – Preventive maintenan ce – Scheduled downtime – Emergency maintenan ce Maintenance Costs The traditional view attempted to balance preventive and breakdown maintenance costs ỵ Typically this approach failed to consider the true total cost of breakdowns ỵ Inventory ỵ Employee morale þ Schedule unreliability þ Maintenance Costs Total costs Costs Preventive maintenance costs Breakdown maintenance costs Optimal point (lowest cost maintenance policy) Maintenance commitment Traditional View Maintenance Costs Costs Total costs Full cost of breakdowns Preventive maintenance costs Maintenance commitment Optimal point (lowest cost maintenance policy) Full Cost View Maintenance Cost Example Should the firm contract for maintenance on their printers? Number of Breakdowns Number of Months That Breakdowns Occurred Total: 20 Average cost of breakdown = $300 Maintenance Cost Example Compute the expected number of breakdowns Number of Breakdowns Frequency Number of Breakdowns Frequency 2/20 = 6/20 = 8/20 = 4/20 = Expected number of = breakdowns ∑ Number of breakdowns x Corresponding frequency = (0)(.1) + (1)(.4) + (2)(.3) + (3)(.2) = 1.6 breakdowns per month Maintenance Cost Example Compute the expected breakdown cost per month with no preventive maintenance Expected breakdown cost = Expected number of x breakdowns = (1.6)($300) = $480 per month Cost per breakdown Maintenance Cost Example Compute the cost of preventive maintenance Preventive maintenance cost = Cost of expected breakdowns if service contract signed Cost of + service contract = (1 breakdown/month)($300) + $150/month = $450 per month Hire the service firm; it is less expensive Increasing Repair Capabilities Well-trained personnel Adequate resources Ability to establish repair plan and priorities Ability and authority to material planning Ability to identify the cause of breakdowns Ability to design ways to extend MTBF How Maintenance is Performed Operator Maintenance department Manufacturer’s field service Depot service (return equipment) Competence is higher as we move to the right Preventive maintenance costs less and is faster the more we move to the left Total Productive Maintenance (TPM) Designing machines that are reliable, easy to operate, and easy to maintain ỵ Emphasizing total cost of ownership when purchasing machines, so that service and maintenance are included in the cost þ Developing preventive maintenance plans that utilize the best practices of operators, maintenance departments, and depot service ỵ Training workers to operate and maintain their own machines ỵ EstablishingMaintenancePolicies ỵ Simulation Computer analysis of complex situations ỵ Model maintenance programs before they are implemented ỵ Physical models can also be used ỵ ỵ Expert systems ỵ Computers help users identify problems and select course of action End of Lecture 32 ... Computers are needed because they are fast , accurate,? ?and? ?have the ability to store? ?and? ?manipulate data? ?and? ?produce information rapidly Bills? ?of? ?Material Bill? ?of? ?Material “a listing? ?of? ?all the subassemblies, intermediates, parts,? ?and? ?raw materials ... available.? ?Inventory? ?records include the status? ?of? ?each item, including amounts on order? ?and? ?on hand? ?and? ?the location Inputs to the MRP System • Bills? ?of? ?Material – • Planning Data – • Bills? ?of? ?material? ?describe components? ?and? ?the quantity? ?of? ?each needed to ... – Lead times Bills? ?of? ?material Inventory? ?Status Planning data Nature? ?of? ?Demand • Two Types? ?of? ?Demand – Independent • • – Is not related to the demand for any other product? ?and? ?must be forecast