Simulating MRP – A New Perspective for Training
| Published date | 01 January 1992 |
| Pages | 7-13 |
| DOI | https://doi.org/10.1108/EUM0000000001443 |
| Date | 01 January 1992 |
| Author | R. Krueger,John Galletly,J. Bicheno |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
SIMULATING MRP - A NEW PERSPECTIVE FOR TRAINING 7
Simulating
MRP
- A New
Perspective
for
Training
R. Krueger, J.E. Galletly and J. Bicheno
A
PC-based MRP simulation system, ideal
for training purposes, is described.
Industrial Management & Data Systems, Vol. 92 No. 1. 1992. pp. 7-13.
© MCB University Press Limited. 0263-5577
Introduction
Many existing computer-based Material Requirements
Planning (MRP) systems are, out of necessity, complex
packages. This complexity arises from the need of such
a package to deal with real-life inventory problems which
can comprise hundreds (or even thousands) of
items.
One
area in which the complexity shows itself is in the user
interface. This has usually been designed for use
by
expert
MRP planners, and as such is unsuitable for teaching
"hands-on" MRP. Pedagogically a complex interface is
bad as it submerges the beginner in a welter of detail
concerned with how to drive the package instead of
allowing him to concentrate on learning the details of
Material Requirements Planning. The complexity of the
user interface usually means that there is
a
lengthy training
period for trainee material managers and production
schedulers. (It is not unusual for a full-time introductory
course to last a week or more.) Since the package and
the computer system it runs on are often costly capital
items (the computer is typically a large, mini-computer
system), the use of such a system for training also incurs
another penalty. Tying up such capital with time-
consuming training periods might not be economically
justifiable.
The software described in this article is a PC-based, MRP
simulation package which has been specifically designed
for training purposes. It encompasses the main features
of existing MRP packages that are used in industry. This
simulator allows the trainee to perform tasks which are
normally undertaken
by
fully-trained MRP specialists. By
performing typical MRP activities in a controlled
environment, a trainee manager or scheduler can quickly
gain a basic knowledge of the most important MRP
features.
The software is written in Turbo-Pascal for an IBM or
compatible PC. A hard disk is preferable, as is a colour
screen, but neither are compulsory.
A
standard graphics
card (VGA, EGA, CGA or Hercules) for the PC is
required.
Material Requirements Planning
Traditionally, to manage a production schedule which calls
for supplying a certain end-product according to the
demand of customers and maintaining a stock of
component parts, the order-point technique is used. This
method assumes a constant demand for
all
items
(not
just
end products) and orders new quantities for
a
specific item
when the corresponding order point
is
reached. The order-
point system can lead to excessive safety stocks being kept
because inventory items are ordered long before they are
actually needed.
MRP,
by contrast, is a technique for dependent demand
inventory
control.
It uses "bill of materials explosion" and
"lead-time offsetting" to ensure that the exact quantities
of components to go into an "end item'' are scheduled
for delivery exactly on time. To maintain the correct
inventory balances when changes occur in the schedule,
when several end items require the same component or
when events do not work out as planned, MRP uses
"netting". During manufacture, MRP keeps track of the
status of
work
in progress, updating records accordingly.
All
this ensures
a
vast improvement over traditional order-
point
methods[l].
Inventory reductions of between
20
and
50 per cent over comparable costs in a traditional order-
point system are not uncommon after the implementation
of MRP.
Adam and Ebert[2] point to the following objectives for
a MRP sytem:
● reduced production and
deliver}'
lead-times;
● realistic delivery commitments to customers, and
● increased operating efficiency.
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