Operations Management: An Integrated Approach, 5th Edition

MATERIAL PLANNING SYSTEMS

In the 1960s, manufacturing planning systems focused primarily on traditional inventory control issues (when to order, how much to order, etc.). This led to the development of material requirements planning (MRP) systems. These systems translated the approved master production schedule of final products into time-phased net requirements for subassemblies and final assemblies for manufacturing and components and raw materials for purchasing. The initial MRP systems evolved into closed-loop MRP.

Closed-loop MRP

An MRP system that includes production planning, master production scheduling, and capacity requirements planning

Closed-loop MRP is an MRP system that includes sales and operations planning, master production scheduling, and capacity requirements planning (discussed in Chapter 13). After realistic and attainable plans are developed, manufacturing executes the plan. This involves input–output capacity measurement, detailed scheduling and dispatching (we will discuss these in Chapter 15), anticipated delay reports from the manufacturing facility and the suppliers, as well as scheduling deliveries from suppliers. Closed-loop means that each function is included in the overall system and that feedback mechanisms are in place to make sure that the plan remains valid.

Manufacturing resource planning (MRP II)

A method for the effective planning and integration ...