RESOURCE PLANNING
AND
CONTROL SYSTEMS
LGSC 6007 Student: Zakira
Phillips
PRODUCTION MANAGEMENT 2023-2024
Agenda
• Introduction to Resource Planning
and Control
• Enterprise Resource Planning
(ERP)
• Material Resource Planning (MRP)
• Dependent and Independent
Demand
• Master Production Schedule
• Relationship between MPS and
MRP
• Differences between MPS and
MRP
• The Theory of Constraints
• What is planning and control?
• Planning and control in business involves ensuring that your
Introduction to Resource company can consistently deliver products and services that
match your customers' expectations by aligning your
Planning & Control production or service capabilities with their demands. It's all
about making sure you meet your customers' needs
effectively and reliably
Introduction to Resource Planning & Control
• What are planning and control systems?
• ▶ Planning and control systems are the
information processing, decision support
and execution mechanisms that support
the operations planning and control
activity.
• ▶ Planning and control systems can take
various forms, but usually have some
common elements such as customer and
supplier interfaces, an information
system, a set of decision rules and
functions to schedule, sequence, load
and monitor operations activities.
• ▶ Hierarchical planning and control
systems separate different kinds of
decisions at different levels in the
organization and over different time
periods
Planning and Control
• At a high level, there are two
primary types of resource planning
systems.
• The first is referred to as
Enterprise Resource Planning
(ERP)
• The second type of resource
planning system is called Materials
Requirements Planning (MRP)
o Enterprise Resource Planning (ERP) o Materials Requirements Planning (MRP)–
This is a process by which a company (oftentimes a Essentially, this is a production planning and inventory
manufacturer) manages and integrates the important parts control system.
of it’s business.
An ERP management information system integrates areas An MRP integrates data from production schedules with
like planning, purchasing, inventory, sales, marketing, finance, that from inventory and the bill of materials (BOM).
and human resources.
https://www.youtube.com/watch?v=Ju55a1atEZw
https://www.youtube.com/watch?v=eoLSZh35_LY
MRP
Simply stated, an MRP is a production
planning and inventory control system.
It works to integrate all of the data
related to your:
• Inventory
• Master Production Schedule
• Bill of Materials (BOM)
Relationship between
MRP and Bill of Materials
• Demand can be independent or dependent. An
independent demand is usually a demand coming
from customers (external and internal), such as a
sales order or a sales forecast.
• Dependent demand refers to the demand for an
item that is directly linked to the demand for
another item or items. This usually occurs in a
production environment where the demand for raw
materials depends on the demand for the final
product.
• A dependent demand is generated by an
independent demand through a bill of materials.
Example
• For example, if I’m selling cupcakes, a sales
orders for 200 cupcakes will generate an
independent demand for a quantity of 200 units
of the item ‘cupcake’.
• Assuming I’m lazy and I use a ready-to-bake
mix to which I just need to add water, then my
cupcakes’ bill of materials (the ingredients in the
recipe) would need 1 bag of ready-to-bake mix
and 0.5 L of water for each batch of 20 cupcakes.
• So in this case, my sales order of 200 cupcakes
is generating dependent demands for 200/20=10
bags of ready-to-bake mix and 200/20*0.5L=5L of
water..
MPS
Master Production Schedule (MPS)-A
detailed plan that outlines the
production schedule for a specific
product line based on the demand
forecast, production capacity and
inventory levels
A Master Production Schedule is used
to determine when the materials will
be used to produce an item.
Relationship between
MRP and MPS
• The MPS is an input of the MRP , The MRP is
used to plan how many materials to order and is
determined based on dependent demand.
• While the MPS is used to determine when to
order an item and is based off of dependent
demand.
Difference between MRP and MPS
Example
• For example, if I’m selling cupcakes, a sales
orders for 200 cupcakes will generate an
independent demand for a quantity of 200 units
of the item ‘cupcake’.
• Assuming I’m lazy and I use a ready-to-bake
mix to which I just need to add water, then my
cupcakes’ bill of materials (the ingredients in the
recipe) would need 1 bag of ready-to-bake mix
and 0.5 L of water for each batch of 20 cupcakes.
• So in this case, my sales order of 200 cupcakes
is generating dependent demands for 200/20=10
bags of ready-to-bake mix and 200/20*0.5L=5L of
water..
• Planning Systems are able to re- solve many critical information issues and may be a
key element in improving overall company operations.
Planning • But simply implementing a system of programs de- signed to transmit data between
different business functions does not guarantee business success.
Systems Overall • There must be an overall guiding philosophy that ensures everyone will focus on the
critical elements necessary to improve companywide performance.
Benefit • The philosophy that many operations managers employ is the Theory of Constraints
(TOC)
whttps://www.youtube.com/watch?v=xJlnlMNGqY4ww.youtube.com/watch?v=xJlnlMNGqY4
What are the benefits of TOC?
1. TOC can help you improve your operational planning by
providing you with a clear and logical framework to identify and
solve the root causes of your problems, rather than treating the
symptoms or chasing local optimizations.
2. By focusing on the constraint, you can leverage the most
impactful point of leverage in your system and achieve
significant improvements in your throughput, quality, customer
satisfaction, and profitability.
3. TOC can also help you align your operational planning with your
strategic goals and vision, ensuring that your actions are
consistent and coherent with your purpose and values.
