Description
Capacity requirement planning (CRP)
CAPACITY REQUIREMENT PLANNING (CRP)
CAPACITY DEFINITION - 1
• Capacity is the rate of output from an operating system per unit of time. • Capacity is based on the output that the system can produce, store and transport. For example, a cement plant may be capable to produce 3000 tons per day (tpd) of cement. • Output could be also measured on the basis of resources available. • The availability of resources can be in terms of number of machine hours, number of labor hours, number of tools, and square meters of the area.
CAPACITY DEFINITION - 2
• In case of an air conditioner, it may be said that there is one air conditioner of 2 ton capacity or there are two air conditioners of 1 ton capacity each to give cooling effect of 2 tons. • Output can also be measured in terms of number of products that can be produced from the process. For example, a tailor making shirts, pants, half pants etc. • Dollar value of products produced is also used as a measure of capacity.
LOAD
• Load is the amount of planned work scheduled and actual work released to a facility, workcenter or operation for a specific time. • Load is usually presented in terms of standard hours of work or units of production. • Load can be classified as ‘Planned Load’ and ‘Released Load’. • Planned load can be calculated on the basis of work to be done in future period in the workcenter. • Released load is actual manufacturing order released for production but might or might not have been carried out at a work-center.
CAPACITY
• Capacity is the capability of the system to perform the expected functions. • Capacity is also the capability of machine, work-center, plant, worker or organization to produce output in a time period. • In short, the amount of work that can be produced by a work-center is known as capacity, whereas the amount of work that needs to be produced to meet the plans is the load.
CAPACITY REQUIREMENT PLANNING (CRP)
• CRP is necessary to ensure that what needs to be produced during a period can in fact be produced. • CRP is a technique that applies a logic similar to that of Material Requirement Planning (MRP) to address the capacity issues in an organization. • CRP develops schedules for planned releases of capacities to specific work orders as identified in an MRP schedule. • The output of an MRP process becomes the basis for the CRP exercise.
UNDERLYING LOGIC OF CRP
MRP planned order releases
Routing file (Process plan)
CAPACITY REQUIREMENTS PLANNING
Capacity Status
Loading schedules for each resource
MRP and CRP – A COMPARISON
Criteria Input MRP Bill of material (Product structure) Master Plan Schedules (MPS) Lead time data Inventory status CRP Routing information (Process plan). MRP Schedules Lead time data Capacity status Capacity load schedules Capacity usage profiles
Lot sizing rules
Output Purchase orders Work orders
CAPACITY REQUIREMENTS PLANNING PROCESS
Start Change MPS, Reschedule orders to level load No Modify MRP Feasible? Yes Capacity Requirement Planning (CRP) Material Requirements Planning (MRP) No Master Production Schedule (MPS) Rough-cut Modify MPS Capacity planning
Feasible?
Yes Finalize plan
NEED FOR FACILITY CAPACITY PLANNING
To find optimal capacity of the facility so that cost of under capacity and over-capacity is minimum
To satisfy future demand of products without any shortage
Need for facility Capacity planning
To maintain the initial investment low and achieve lower break-even volume
Investment in facility capacity are long-term and cannot be reversed easily
OPTIONS FOR INCREASING THE MAXIMUM CAPACITY
• Increase the number of machines • Increase the number of operating hours in the shift • Increase the number of shifts, if possible • Deploy trained manpower • Avoid loss due to scrap or damages • Waste of time by workers is controlled and not allowed. • Incentives are given to workers to perform at higher rate • Outsourcing the part of the workload
doc_799275509.ppt
Capacity requirement planning (CRP)
CAPACITY REQUIREMENT PLANNING (CRP)
CAPACITY DEFINITION - 1
• Capacity is the rate of output from an operating system per unit of time. • Capacity is based on the output that the system can produce, store and transport. For example, a cement plant may be capable to produce 3000 tons per day (tpd) of cement. • Output could be also measured on the basis of resources available. • The availability of resources can be in terms of number of machine hours, number of labor hours, number of tools, and square meters of the area.
CAPACITY DEFINITION - 2
• In case of an air conditioner, it may be said that there is one air conditioner of 2 ton capacity or there are two air conditioners of 1 ton capacity each to give cooling effect of 2 tons. • Output can also be measured in terms of number of products that can be produced from the process. For example, a tailor making shirts, pants, half pants etc. • Dollar value of products produced is also used as a measure of capacity.
LOAD
• Load is the amount of planned work scheduled and actual work released to a facility, workcenter or operation for a specific time. • Load is usually presented in terms of standard hours of work or units of production. • Load can be classified as ‘Planned Load’ and ‘Released Load’. • Planned load can be calculated on the basis of work to be done in future period in the workcenter. • Released load is actual manufacturing order released for production but might or might not have been carried out at a work-center.
CAPACITY
• Capacity is the capability of the system to perform the expected functions. • Capacity is also the capability of machine, work-center, plant, worker or organization to produce output in a time period. • In short, the amount of work that can be produced by a work-center is known as capacity, whereas the amount of work that needs to be produced to meet the plans is the load.
CAPACITY REQUIREMENT PLANNING (CRP)
• CRP is necessary to ensure that what needs to be produced during a period can in fact be produced. • CRP is a technique that applies a logic similar to that of Material Requirement Planning (MRP) to address the capacity issues in an organization. • CRP develops schedules for planned releases of capacities to specific work orders as identified in an MRP schedule. • The output of an MRP process becomes the basis for the CRP exercise.
UNDERLYING LOGIC OF CRP
MRP planned order releases
Routing file (Process plan)
CAPACITY REQUIREMENTS PLANNING
Capacity Status
Loading schedules for each resource
MRP and CRP – A COMPARISON
Criteria Input MRP Bill of material (Product structure) Master Plan Schedules (MPS) Lead time data Inventory status CRP Routing information (Process plan). MRP Schedules Lead time data Capacity status Capacity load schedules Capacity usage profiles
Lot sizing rules
Output Purchase orders Work orders
CAPACITY REQUIREMENTS PLANNING PROCESS
Start Change MPS, Reschedule orders to level load No Modify MRP Feasible? Yes Capacity Requirement Planning (CRP) Material Requirements Planning (MRP) No Master Production Schedule (MPS) Rough-cut Modify MPS Capacity planning
Feasible?
Yes Finalize plan
NEED FOR FACILITY CAPACITY PLANNING
To find optimal capacity of the facility so that cost of under capacity and over-capacity is minimum
To satisfy future demand of products without any shortage
Need for facility Capacity planning
To maintain the initial investment low and achieve lower break-even volume
Investment in facility capacity are long-term and cannot be reversed easily
OPTIONS FOR INCREASING THE MAXIMUM CAPACITY
• Increase the number of machines • Increase the number of operating hours in the shift • Increase the number of shifts, if possible • Deploy trained manpower • Avoid loss due to scrap or damages • Waste of time by workers is controlled and not allowed. • Incentives are given to workers to perform at higher rate • Outsourcing the part of the workload
doc_799275509.ppt