Case Study Rolls Royce Economics Essay

Case Study Rolls Royce Economics Essay By instructing that parts and sub-assemblies are only produced to meet that demand MRP seeks to meet projected customer demand. Using the bill of materials to calculate how many are needed and when they must be made MRP back schedules demand for part and sub-assemblies. This is how MRP connects customer demand with the internal and external supply network. Although JIT planning and control has similar objectives. Derived from end-customer demand Pull scheduling parts only move in response to matched and synchronised signals (Slack, 2004). MRP is driven by the MPS that identifies future end-item demand. Using a computer to calculate how many of, and when, each part should be made a fixed lead-time environment is modelled. Its output is of time-phased environment plans that are centrally calculated and coordinated. Regardless of whether the next process can take or actually need the part at that time it is made in response to central instructions. The authority of MRP is undermine and make the plans unworkable at the shop floor level due to day-to-day disturbances, such as quality problems and inaccurate stock records. While MRP is excellent at planning, it is weak at control (Slack, 2004). MRP II is more precise than MRP because it instigates production of a variety of components, releases orders and offsets inventory reductions. â€Å"MRP II grasps the final product by its parts, orders their delivery to operators, keeps track of inventory positions in all stages of production, and determines what is needed to add to existing inventories† (Karmarkar, 1989). Through such products as SAP and Oracle, MRP II has led to additional advancements such as ERP. An ERP system consists of a suite of software modules, where each module is usually responsible for a separate business function. Its functionality has increased by new software capabilities; however the core planning and control assumptions that underline these packages have developed less rapidly (Steven son, 2005). Case Study: Rolls Royce One of the world’s largest manufacturers of the gas turbines is Rolls Royce. Their products are used to in civil aircraft, military aircraft, fast ships and power generation in addition to many other uses. Typically each product has around 25,000 parts as they are exceptionally complex products, and have hundreds of assemblies and sub-assemblies. Moreover, their production is equally complex with thousands of work centres in many different locations and over 600 external suppliers. Rolls Royce was one of the earliest users of computers to help with the task due to the complexity of planning and controlling their manufacture. Conventionally the company developed its won systems and software. The company then decided on implementing a standard ERP system, which was supplied by SAP and was their best selling R/3 product. This system offered a number of advantages over the approach previously used within the company. Significantly, it was an of f-the-shelf system that would force the company to implement a standardised and disciplined approach. Ultimately the entire organisation would use a singular modular database that would reduce duplication and errors. â€Å"There was an extensive data clean up to ensure accuracy and integrity of existing information, and all existing processes were reviewed and standardisedà ¢Ã¢â€š ¬Ã‚ ¦.Within operations we have already seen a significant reduction in inventory, improved customer service, and substantially improved business information and controls.† (Slack, 2004)