CRP System

The CRP system converts those orders into standard labor and machine hours of load on the appropriate workers and on the machines as identified from the work center status and shop routing files. The output is a load-projection report work center-wise. If the work centre capacities are adequate, the planned order releases are verified for the MRP systems and released orders become purchase and shop orders. Work load reports are also used for controlling input and outputs. If the initial load projection report reveals inadequacy of capacity in any work center, either the capacity must be increased (by using overtime or sub-contracting) or the master production schedule must be revised.

CRP Inputs:

The major inputs for CRP process are:

1. Planned orders and released orders from MRP system.
2. Loading information from the work centre status file.
3. Routing information from the shop routing file.
4. Changes which modify Capacity, give alternative routings or altered planned orders.

All these inputs must be given in time if the system is to function effectively.

Planning activity: They are infinite loading and finite loading.

Infinite loading is the process of loading work centers with all the loads when they are required without regard to the actual capacity of work centers. This given information about actual released order, demands upon the production system, so that, decision about overtime, using alternative routings, delaying selected orders, etc., can be taken.

Finite loading can be done automatically with computerized loading systems, limiting the load assigned to work centers in each period as per the installed/available capacity at each work centre. This method of loading forces changes back into the MPS, which is not always the best solution to scheduling problems and hence not useful at CRP stage. Finite loading is more useful to single work-centers in the capacity control stage where jobs are being scheduled.

CRP Outputs:

1. Rescheduling information which calls for capacity modification or revision of MPS.
2. Verification of planned orders for MRP system and
3. Load reports.

Aggregate Capacity planning Strategies

Aggregate capacity planning involves planning the best quantity to produce during time periods in the intermediate-range horizon and planning the lowest-cost method of providing the adjustable capacity to accommodate production requirements.

Traditional aggregate plans for a manufacturing operation involve planning the work force size, production rate (working hours per week) and inventory levels. Two- types of aggregate plans that are commonly used are:

1. ‘Level capacity’ plan and
2. ‘Matching capacity with aggregate demand’ plan.

Level Capacity Plan: Level capacity plans have uniform capacities per day from time period to time period.

The underlying principle of level capacity plan in produce to stock and sell firms is ‘operate production systems at uniform production levels and let finished goods inventories rise and fall as they will, to buffer the differences between aggregate demand and production levels from time period to time period.

Matching Capacity with Aggregate Demand Plan:

In this plan, the production capacity is matched with the aggregate demand in each time period. The work force is fluctuated to support the aggregate plan. Material flows and machinery capacity would be allowed to change from quarter to quarter to match the aggregate demand. The main advantage of this plan is the lower levels of finished goods inventory resulting in lesser carrying costs when compared to level capacity plan. However, labor and material costs tend to be higher because of frequent changes in work force (hiring, training and lay-off costs), material supplies and increasing or decreasing machine capacities.