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.