Revised MRP for reducing inventory level and smoothing order releases: a case in manufacturing industry

Abstract

Although material requirement planning (MRP) systems are widely used in manufacturing companies, they exhibit significant drawbacks. Rev MRP algorithm has been developed in order to reduce the system nervousness, generate a more regular pattern of order released and lower inventory levels. The aim of this paper is to test the Rev MRP algorithm on the case of one of the largest Italian manufacturing companies of home appliances. The company provided three sets of real data, referring to three different runs of their MRP. Results showed that the Rev MRP outperformed the company’s MRP smoothing the production order releases, eliminating overshoots and drastically reducing the inventory levels along the supply chain, even in case of frequent forecasts updates

On Just-In-Time Production Leveling

“…For example, the MRP algorithm includes a lot-sizing phase, which results in product batching; this tends to generate higher stock levels compared to the JIT approach. Several studies have been carried out on MRP lot-sizing [6] and trying to improve the algorithm performance [7,8,9]; however, it seems that JIT can outperform MRP given the heijunka condition, in case of leveled production both in quantity and in mix. The traditional JIT technique to manage production flow is named kanban.…”

An Analysis of the Effect of Operations Management Practices on Performance

“…), or the "Total Productive Maintenance" (TPM) approach [16], with regard to maintenance practices, or the "Just-in-Time" (JIT) approach [17], with regard to production operations (also including heijunka and kanban [18]). Other more specific methodologies, meant to address particular problems, can be important as well; among these we recall those conceived to optimize order processing [19], warehouse management [20] [21,22,23], and material management [24] As an example, we describe the case of Total Quality Management (TQM) [29]. The adoption of this approach has been shown to be positively associated with the improvement of general performance [30], with a higher operation efficiency [31] and with better financial results [32].…”

Dynamic Buffer Management for Raw Material Supply in the Footwear Industry

“…Thus, the concepts of the TOC present a framework to identify constraints and improve performance of companies [3]. In this context the management of inventories has been becoming one of the major challenges facing managers with regard to the planning and the control, especially in manufacturing companies [4].…”