Operations Management: An Integrated Approach, 5th Edition

RESOURCE PLANNING WITHIN OM: HOW IT ALL FITS TOGETHER

Enterprise resource planning provides a common database for use by an organization, its suppliers, and its customers. Second-generation ERP systems are designed to support supply chain management and e-commerce. These systems automate routine transactions and provide real-time information to all members of the enterprise. ERP systems typically have a production and materials module (MRP) to determine what is needed, how much is needed, and when it is needed.

MRP reports are used by the production and inventory planners to (1) generate purchasing requisitions and (2) develop schedules of different activities to be done on the manufacturing floor. Techniques for sequencing activities are discussed in Chapter 15. The authorized MPS, the bill of material (BOM) file, and the inventory records are inputs to the MRP system. It is critical that the MPS be feasible and that the BOM file and the inventory records be accurate. This implies that the time standards (Chapter 11) are valid and that cycle counting (Chapter 12) is used to maintain inventory record accuracy. If not, material is not ordered at the appropriate time in the right quantity. The master scheduler is responsible for the feasibility of the MPS, and a manufacturing engineer is probably responsible for the BOM file. The production and inventory planners are often held accountable for the accuracy of the inventory records.

Even though rough-cut capacity planning (RCCP) using ...