FINALS REACTION PAPERS PRODUCTION MANAGEMENT (PRM BA 224) DECEMBER 2022 MATERIAL REQUIREMENTS PLANNING (MRP) and ERP Material requirements planning (MRP) schedules production and inventory when demand is dependent. For MRP to work, management must have a master schedule, precise requirements for all components, accurate inventory and purchasing records, and accurate lead times. When properly implement, MRP can contribute in a major way to reduction in inventory while improving customer service levels. MRP techniques allow the operations manager to schedule and replenish stock on a “need-to-order” basis rather than simply a “time-to-order” basis. Many firms using MRP systems find that lot-for-lot can be the lowcost lot-sizing option. The continuing development of MRP systems has led to its use with lean manufacturing techniques. In addition, MRP can integrate production data with a variety of other activities, including the supply chain and sales. As a result, we now have integrated database-oriented enterprise resource planning ERP payments. These expensive and difficult-to-install ERP systems, when successful, support strategies of differentiation, response and cost leadership. LAYOUT DECISIONS Layouts make a substantial difference in operating efficiency. The seven layout situations are office, retail, warehouse, fixed position, process oriented, work cells and product oriented, work cells and product oriented. A variety of techniques have been developed to solve these layout problems. Office layouts often seek to maximize information flows, retails firms focus on product exposure, and warehouses attempt to optimize the trade-off between storage space and material handling cost. The fixed-position layout problem attempts to minimize material handling costs within the constraint of limited space at the site. Process layouts minimize travel distances times the number of trips. Product layouts focus on reducting waste and the imbalance in an assembly line. Work cells are the result of identifying a family of products that justify a special configuration of machinery and equipment that reduces material material travel and adjusts imbalances with cross-trained personnel. Often, the issues in a layout problem are so wide-ranging that finding an optimal solution is non possible. For this reason, layout decisions, although the subject of substantial research effort, remain something of an art. SUPPLY CHAIN MANAGEMENT Competition is no longer between companies but between supply chains. The key to success is to collaborate with members on both the supply side and the distribution side of the supply chain to make decisions that will benefit the whole channel. For many firms, the supply chain determines a substantial portion of product cost and quality as well as opportunities for responsiveness and differentiation. The challenge of building a great supply chain is significant, but with good sourcing tactics, a thoughtful logistics plan, and active management of the distribution network, each link in the chain can be firmly forged. A number of metrics are available to help managers evaluate their supply chain performances and benchmark against the industry. Skillful supply chain management provides a great strategic opportunity for competitive advantage. INVENTORY MANAGEMENT Inventory represents a major investment for many firms. This investment is often larger than it should be because firms find it easier to have “just-in-time” inventory. Inventories are of four types: Raw material and purchased components, work-in-process. Maintenance, repair and operating (MRO), and Finished goods. In this topic, we discussed independent inventory, ABC analysis, record accuracy, cycle counting and inventory models used to control independent demands. Thank you.