Operations and Supply Chain Management The Core

268 OPERATIONS AND SUPPLY CHAIN MANAGEMENT
exhibit 9.2
Industry Applications and Expected Benefits of MRP
INDUSTRY TYPE
Assemble-to-stock
Make-to-stock
Assemble-to-order
Make-to-order
Engineer-to-order
Process
EXAMPLES
Combines multiple component parts into a finished product, which is then stocked in inventory to
satisfy customer demand. Examples: watches, tools, appliances.
Items are manufactured from purchased materials rather than assembled from parts. These
are standard stock items carried in anticipation of customer demand. Examples: piston rings,
electrical switches.
A final assembly is made from standard options that the customer chooses. Examples: trucks,
generators, motors.
Items are manufactured from purchased materials to customer order. These are generally
industrial orders. Examples: bearings, gears, fasteners.
Items are fabricated or assembled completely to customer specification. Examples: turbine
generators, heavy machine tools.
Includes industries such as foundries, rubber and plastics, specialty paper, chemicals, paint, drug,
food processors.
EXPECTED
BENEFITS
High
Low
High
Low
High
Medium
tend to be too long and too uncertain, and the product configuration too complex. Such
companies need the control features that network scheduling techniques offer. These project
management methods are covered in Chapter 5.
Master production
schedule (MPS)
A time-phased plan
specifying how many
end items the firm
plans to build, and
when.
Master Production Scheduling
Generally, the master production schedule (MPS) deals with end items (typically finished
goods items sold to customers) and is a major input to the MRP process. If the end
item is quite large or expensive, however, the master schedule may schedule major subassemblies
or components instead.
All production systems have limited capacity and limited resources. This presents a
challenging job for the master scheduler. Although the aggregate plan provides the general
range of production each week by product group, the master scheduler must specify
exactly what is to be produced for each individual item within the group. These decisions
are made while responding to pressures from various functional areas such as the
sales department (meet the customer’s promised due date), finance (minimize inventory),
management (maximize productivity and customer service, minimize resource needs), and
manufacturing (have level schedules and minimize setup time).
To determine an acceptable, feasible schedule to be released to the shop, trial master
production schedules are run through the MRP program, which is described in the next section.
The resulting planned order releases (the detailed production schedules) are checked
to make sure that resources are available and that the completion times are reasonable.
What appears to be a feasible master schedule may turn out to require excessive resources
once the required materials, parts, and components from lower levels are determined. If
this does happen (the usual case), the master production schedule is then modified with
these limitations and the MRP program is run again. To ensure good master scheduling,
the master scheduler (the human being) must
∙ Include all demands from product sales, warehouse replenishment, spares, and interplant
requirements.
∙ Never lose sight of the aggregate plan.
∙ Be involved with customer order promising.