MRP Chap 1

MRP Chap 1

1. Basic Strategy in Developing a Production Plan

   • Chase Strategy
     • Producing the amount demanded at any given time
       • Inventory level remains stable while production varies to meet demand
         • Suitable for industries which inventory cannot be stored eg restaurant
           • Disadvantage: When demand is low, cost is high (hiring and firing)
             • Advantage: Always meets demand
   • Subcontrating
     • Continuously producing at the minimum demand and meeting additional demand through subcontracting
       • It could mean meeting the demand by purchasing additional amount demand
         • It could also mean turning away demand by increasing lead time and prices
           • Advantages: loyalty of workers, less risk of bankruptcy and avoid cost associated with excess capacity
             • Disadvantage: increase cost due to purchasing the additional amount
   • Production leveling
     • Continuously Producing at the average demand
       • Smooth operation and minimise cost of the changing production levels
         • Inventory might build up when the demand is low hence increasing carrying cost
           • Advantages: loyalty and easy to plan
             • Cost might be high when demand is low

2. Types of Manufacture strategies

   • MTO
     • Customers provide company with the design and manufacturing requirements in terms of tolerance
       • Similar to ETO but lack engineering component
         • Company may have a series of products but only produces when orders are received
           • Companies can also subcontact the parts
             • Company might already have the design if it is on a regular basis
   • ATO
     • Company produces many basic models with a variety of options with many configurations
       • Uses forecasting techniques to predict demand before proceeding to make them
         • Final option to make only occurs when the company orders them whereby the assembly to suit customer needs occurs only after the orders are received
           • Only parts purchased are the parts for options, hence this limits the work to assembling which results in short lead time
   • ETO
     • Customer provides the company with the specifications the product
       • The company will then the design of the product, draw out manufacturing plans, purchase material, fabricate parts and assemble the final product
         • Carry out necessary test to see if it meets customer requirements
           • As engineering is involved, it requires resources such as development and design work to be carried out, hence it is difficult to stick to a specific timetable or lead time
             • The main issue is the lead time is estimated, as engineering is involved, the production control system has to be extended to include this component
             • Includes
               • Designing the product
                 • Check the design through analysis
                   • Build prototype and test it
                     • Produce manufacturing drawings
                       • Come out with production plans
                         • Come up with material list
                           • Identify material supplier
                             • Manufacture and test it
                               • Ship to customer
   • MTS
     • Company forecast the demand and produce them in advance
       • Demand is met from inventory while safety stock are kept in case of fluctuation in demand
         • No specific scheduleing is required as far as order dates are concerned

3. Types of manufacturing system

   • Job shop SME
     • Low volume, lots of just one of a kind are common
       • Types of work varies form orders to orders, there are rarely repeated orders
         • Production team must be flexible with the general purpose of accommodating a variety of work
           • Almost any jobs can be taken up by a job shop
           • The workers are highly skilled to the extend that the can handle any work. They are either highly skilled or broadly skilled
   • Batch Manufacturing
     • Used to satisfy continuous demand of an item
       • Produces items in batches and then changes to another item
         • Plants must be able to produce many medium size lots, not suitable for one of kind of item
           • Can have large or small lot size depending on the type of work
             • Machines are used for general purposes but a designed for higher production rates
               • Uses jigs and fixtures to hold work piece and guide tools. Helps to increase production and reduce the amount of skill required
                 • Skill level: semi skilled
                   • Handle a spectrum of manufacturing process
   • Mass Production
     • Producing identical product in high production rates
       • Uses machines dedicated to producing the single part
         • If the part is no longer needed the machines will be scraped
           • Important to identify if the parts are need in high voulmes in a long run before choosing mass production as an option
             • The whole plan can be solely dedicated to produce a single part
               • Specialised tools can be used for work holding and transfer
                 • Operations can be automated
                   • 2 categories
                     • Quantity production
                       • Mass production of a single part in large numbers using dedicated machines
                     • Flow production
                       • Product is being made into flow while work is being done to it
                     • Important to check for continuous demand as plants are built for this, heavy investment
                       • Skill level: low, repetitive jobs

4. Discrete Products

   • Have their shape an quantity which is countable
   • Process Industry
     • Only 1 item is manufactured, identified as 1 item although they can be packed