Page 263 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes adequate capacity then we can go for the final master plan that would ultimately lead us to the
Material Requirement Planning.
The MRP can be understood with the help of following (Figure 13.1).

13.4.3 Benefits of MRP System

As shown in the Figure 13.1, it is clear that the MRP system is very much commendable to
computerisation. Hence for very large number of products e.g., for many assembled products,
perhaps with sub-assemblies, the number of parts involved can easily be in thousands.
Requirement generation, inventory control, time phased orders and capacity requirements, all
have to be coordinated. All this can be done in a relatively straight forward manner. Thus
practically all advantages of computerised planning can be thought of with MRP system e.g.,
change in production schedule due to change in market demand, cancellation of orders, change
in procurement policy, delays in receipt of incoming materials and also the change in capacity
planning etc., all this may reduce idle time at various stages and hence may increase productivity
by men, machine & materials.

Self Assessment

Fill in the blanks:

8. …………………..is a technique of determining the requirements of raw materials,
components, spares etc., required for the manufacturing of the product.
9. If the delivery date of finished product is known in advance, then ……………time and
quantity of other work-in-progress can be planned accurately with the help of mathematical
calculations.
10. The ………………contains all the constituents of the production process that would finally
lead to the resultant product.

13.5 Timing Decision

An industry is a methodical economic activity. It produces physical products or services. Jobs
have to be planned. Time schedules for these jobs or for tasks within an assignment are essential.
This is uncomplicated to understand. The role of operations planning and scheduling is, therefore,
clear. While the time ‘craft’ became an ‘industry’ businessmen have understood the function of
planning/scheduling production/operations. In fact, one may argue that those nations/ peoples
that deliberately cared for time industrialized faster. Those nations that believed in a lax or
relaxed notion of time may have had crafts but these industrialized rather slowly. Thus ‘time’
has been linked with industry.

!
Caution Without the schedules there will be chaos
Though, the focus on time in the early half of the twentieth century-the century of worldwide
industrialization- had been about bringing order into the otherwise chaos. It was concerning
making one’s own life a little easier. There was this demand function for the products that
required to be addressed to. In a job-shop environment, the by now given promises had to be
met. This involved some planning and numerous short term decisions or firefighting.
Production had to be planned and then the deviations (which were ordinary) had to be controlled.
Time was something that a market demanded or an individual customer requests for. Time was
a constraint.

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