Application of MRP in manufacturing company of Bangladesh

Abstract

rhe present stlldy was conducted On a local transformer manufactunng company. This is a fabrication/assembly organization where raw materials arc procured and processed. The scenario observed in the study is not velY different from other local industries. Local firms in many cases are very reluctant or pay less attention in incorporating and utilizing operations managcment techniques such a, invcnlOry control, scheduling, material requirements planning (l\1RP) etc. The main rCaSOnof the organi7.ation's unenthusiastic attitlldc is identified as unawarene,,, of lhc benefits from technology utilization, The lack of knowledge about lhe benefil;1;of using MRP in variou, aspecls hindercd its wide spread diffusion, A general perception that the pl'Ocurement of raw materials either in huge quantity at a lime or in small quanllly from penod to period without adopting any mathematical approach would not have any sigmficant effect on the total cost still prevails in the local firms, Practically the situation is djfferent. It has been found thaI the procurem~nt of matcnals applymg an established algorithm (i,e \\lagner-Whitin apPl'Oach)imtead of current practice (intuihvc approach) could reduce the invenlory costs remarkably. In this re8pect (lot sizing) an educational version pl'Odnction and operation management software named POM was used, The study revealed thaI the company could <ave as hIgh as 70% inventory cost such as silicon steel. Similar is the sltuar;on for other materials also. Besides this, the incorporation ofMRP facilitates the company in many ways especially in better management such as avoIdance reordering, shortfall, of materials, idle time minimization, timely delivery of products etc, It is required for the company to bring in change in many aspects to adapt the MRP system, the imporlanl of whICh arc the relationship with vendor, con<istent quality of the raw materials, th~ documcntation pl'Ocess, the reliable lead time etc. Situation could be improved further if mathematical model for multiple ilems lot s;7-eand variable lot size could be developed considering the conSlI'aintof store" fund, transport facility etc.