CONCEPT

1. MATERIAL REQUIREMENT
PLANNING & BILLS OF
MATERIAL

2. Material Requirement
Planning (MRP)

3. • DEFINITION
Material requirements planning (MRP)
refers to production planning and inventory
control software systems that are used to
manage the manufacturing process.
A materials requirement planning (MRP)
information system is a sales forecast-based
system used to schedule raw material
deliveries and quantities, given assumptions
of machine and labor units required to
fulfill a sales forecast.

4. OBJECTIVES OF MRP
 To ensure that material and components
are available for production, and final
products are ready for dispatch.
• To maintain minimum inventory but also
ensure right quantity of material is available
at the right time to produce right quantity of
final products.
• To ensure planning of all manufacturing
processes, this scheduling of different job
works as to minimize or remove any kind of
idle time for machine and workers.

5. ADVANTAGES OF MRP
• It helps in maintain minimum inventory
levels.
• With minimum inventory levels, material
planning also reduces associated costs.
• Material tracking becomes easy and ensures
that economic order quantity is achieved for
all lot orders.
• Material planning smoothens capacity
utilization and allocates correct time to
products as per demand forecast.

6. DISADVANTAGES OF MRP
• Material planning is highly dependent on
inputs it receives from other systems or
department. If input information is not
correct than output for material planning
will also be incorrect.
 Material planning system requires proper
training for end users, as to get maximum
out of the system.
• Material resource planning system requires
substantial investment of time and capital.

7. • AAKIF
• ROLL NO. 46
• TOPIC:-STEPS IN MRP

8. Three Basic Steps of MRP
• Identifying Requirements
• Running MRP – Creating the
Suggestions
• Firming the Suggestions

9. Step 1: Identifying the
Requirements
• Quantity on Hand
• Quantity on Open Purchase Order
• Quantity in/or Planned for
Manufacturing
• Quantity Committed to Existing Orders
• Quantity Forecasted

10. Step 2: Running MRP –
Creating the Suggestions
• Critical Items
• Expedite Items
• Delay Items

11. Step 3: Firming the
Suggestions
• Manufacturing Orders
• Purchasing Orders
• Various Reports

12. • BURHAAN MUZAFAR
• ROLL NO.59
• TOPIC:-OVERVIEW OF MRP
SYSTEM

13. Overview of the MRP System
Product
Structure
File
Master
Production
Schedule
Inventory
Master File
Material
Requirements
Planning
Manufacturing
Orders
Purchase
Orders
Various
Reports

14. MRP Inputs
• Product Structure File
• Master Production Schedule
• Inventory Master File

15. MRP Outputs
• Manufacturing Orders
• Purchasing Orders
• Various Reports

16. • MUNEER AHMAD
• ROLL NO. 87
• TOPIC:-BILLS OF MATERIAL

17. Definition
Bill of Materials (BOM)
• A listing of all the subassemblies,
intermediates, parts, and raw materials that
go into a parent assembly showing the
quantity of each required to make an
assembly.
Bozarth, Cecil C. and Handfield, Robert B. Introduction to Operations
and Supply Chain Management

18. Types of BOMs
• Static (fixed) bill
– A bill of material for a part that is normally made from
the same components, labor and raw materials.
– Used for standard assemblies, components, and
engineer-to-order customer orders.
• Example:
– A bill of materials for a standard chair

19. Definition Explained
• Basically, a bill of material (BOM) is a
complete list of the components making up
an object or assembly.
• It is also part of material requirements
planning (MRP)

20. Types of BOMs
• Dynamic (parametric) bill
– A bill of material for a product or part for
which size, color, laminate, and other options
can be selected.
• Example:
– A bill of materials for a Dell computer

21. Types of BOMs
• Single level bill of material
– A bill of material that lists the materials, parts
and labor required to make another part.
• Example:
– A bill of materials to make a Dell computer

22. Types of BOMs
• Multilevel bill of material
– A bill of material that lists the components, assemblies,
and materials required to make a part, the components,
assemblies, and materials required to make each
component and assembly of the part, and so forth.
• Example:
– A BOM for the battery inside the Dell computer.

23. • JUNAID HASSAN
• ROLL NO.75
• TOPIC:-INFORMATION
CONTAINED IN BILLS OF
MATERIAL AND BENEFITS OF
BOM

24. What information is on a BOM?
1. Quantity
2. Item ID
3. Description of Item
4. Cost of Item
5. Total Project Cost

25. Quantity
• Tells user how many of each part is
needed for each project
• Example:
–A chair needs 1 seat, 4 legs, 1 back,
and 5 nails.

26. Item ID
• Tells us which part to order
• Example:
– The chair needs a 2PC seat, 5DR legs and 1 inch nails.

27. Description of Item
• Provides a check that the
correct item is being ordered.

28. Cost of Item
• Cost is included to show how much each part is
per item and the total cost of all like parts.
• Example:
– The cost of a leg is RS 5 per leg. Then the total price
of the legs ordered would be RS20 because there are 4
legs.

29. Total Project Cost
• Shows the total cost of all items and is also the
total cost of the direct materials used in the
project.
• Example:
– Seat RS10, Back RS5, Leg RS5 per leg, Nail
RS 5 per nail
– Total Cost of a chair = 10 + 5 + 5*4 + .5*5 =
RS 37.50

30. Benefits of a BOM
 Help to maintain an accurate record of information.
 Improve material management through responding to
changes in production.
 Control inventory levels.
 Reduce obsolete parts;
 Control and reduce manufacturing costs;
 and provide what-if capabilities for estimates