18s-1: Describe the features of a CRP system.

Capacity planning for the medium time range is called capacity requirements planning or CRP. A computerized CRP system uses the data file from the MRP system and calculates loads for the company’s various work centers that approximately balance the available capacities in these work centers. Specifically, CRP compares the loads required from the various work centers by current and future shop orders against the capacity available in each work center for each time period. The goal of CRP is to regulate both the flow of work orders and work center capacities to achieve a steady flow of work with minimal load backup. The key inputs to a CRP system are planned order releases from the MRP system; load information from the work center status file; routing information from the shop routing file; job times; and any changes that will modify capacity, provide alternate routings, and change planned orders. The key outputs of the CRP system are load projection reports on key work centers.

18s-2: Identify the features of an MRP II system and its benefits.

Manufacturing resource planning (MRP II) extends the closed loop MRP system by adding modules such as financial and human resources planning and cost and revenue inputs. Although MRP is concerned with only planning and acquiring the materials needed for production, MRP II goes beyond that by integrating additional data—employee, machinery, and financial resources— essential for the successful operation of a manufacturing plant. By centralizing, integrating, and processing real-time information, MRP II creates detailed production schedules to coordinate the arrival of component materials with resources such as machine and labor availability.

18s-3: Describe an ERP system and its common modules, its benefits, and its drawbacks.

ERP is an enterprise-wide information system that enable companies to (1) integrate and automate the flow of information across all departments within a company; (2) standardize business processes, enabling the coordination of all resources and activities within the business enterprise; and (3) use a centralized database with a common computing platform to provide all users with a unified, consistent, uniform environment. An ERP system typically contains the following modules: manufacturing module, human resources management (HRM), supply chain management (SCM), finance/accounting, and customer relationship management (CRM). ERP software creates a number of organizational benefits, including (1) significant reductions in operating, administrative, and inventory costs; (2) improvements in communication, productivity, and efficiency from integration and information sharing among the various departments; (3) elimination of the problem of coordinating and synchronizing changes between many systems; (4) provision of a real-time, enterprise-wide view of the business that facilitates faster and more effective decision making; and (5) reductions in production and delivery lead times. The biggest limitations of adopting an ERP are that it is expensive and may require constant updating and system monitoring.

18s-4: Identify the effects of MRP, MRP II, and the ERP systems on supply chains.

MRP, MRP II, and ERP systems affect supply chains by (1) improving on-time delivery, (2) improving quality performance, (3) improving supplier relations, (4) ensuring availability of sufficient supplier capacity, (5) contracting for capacity, and (6) reducing paperwork.

18s-5: Describe the features of a DRP system.

Companies in a supply chain that are involved in logistics activities needed a systematic and detailed approach for planning and controlling product distribution. DRP is a powerful and widely used technique by companies that are involved in all phases of a supply chain. DRP generates a time-phased inventory replenishment plan to manage and minimize inventories in the supply chain. The underlying idea behind a DRP system is that, by generating accurate forecasts of demand, time-phased delivery schedules can be developed. DRP and its procedures are similar to those of MRP. The DRP process typically begins at the retail level (the farthest point of the outbound supply chain network).

18s-6: Describe how ERP systems can promote sustainability.

Companies can use the ERP system to promote sustainability by embedding sustainability into ERP calculations and scheduling. Integrating sustainability into ERP systems can be achieved by factoring in the additional costs of producing products and using efficient plants and equipment that have low carbon emissions, by scheduling production at a time when energy sources that have low carbon emissions are available, and by operating plants in regions where wind or solar power is available.

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