In India, the words "Gandhian" or "jugaad" are also considered for Frugal innovation. Limitations of Frugal innovation MRP is a computer program that translates finished product requirements into time-phased requirements for each dependent demand items. The Bill of Materials(BOM) one of the three primary inputs of MRP

1. Frugal innovation
 Necessity is the mother of all inventions.
 Frugal innovation or frugal
engineering is the process of reducing the
complexity and cost of goods and its
production.
 Removing nonessential features from
adurable good

2. Frugal innovation
 Designing products for developing countries may
also call for an increase in durability and, when
selling the products, reliance on
unconventional distribution channels.
 Globalization and rising incomes in developing
countries may also drive frugal innovation.
 Such services and products need not be of inferior
quality but must be provided cheaply.

3. Frugal innovation
 "Frugal engineering" was coined by Carlos
Ghosn, then joint chief
of Renault and Nissan,, who stated, "frugal
engineering is achieving more with fewer
resources."
 In India, the words "Gandhian" or
"jugaad",
 At times this no frills approach can be a kind
of disruptive innovation

4. Frugal innovation-Nano

5. Frugal innovation-Chotu cool
Godrej

6. Frugal innovation-Jaipur Leg

7. Frugal innovation-Flipkart

8. Frugal innovation- washing-cum-
exercise machine

9. Frugal innovation-MittiCool

10. Limitations of Frugal innovation
 Low cost but not long lasting
 The company has to bear a high cost to keep the
customers.
 Mr Mittal said the extra cost of servicing rural
customers, and their low usage levels, had made things
unprofitable. India's low-cost telecoms revolution has,
it seems, reached its limit.
 Some blame Tata's marketing, but other carmakers say
they cannot achieve such a low price without
compromising on quality, and that customers are wary.

11. Limitations of Frugal innovation
 In air travel, insurance, consumer finance
and satellite TV, companies have cut prices
to build their customer bases over the past
five years but could not reduce costs enough
to compensate, and compromised on
quality.
 Consumer-goods firms are often keen to
move away from cheap products, where
Chinese rivals pose the greatest threat.

12. Material Requirement planning

13. Material Requirement planning
 Materials Requirement Planning is a special technique
to plan the requirements of materials for production.
Dependent
demand
items
Independent
demand items
EOQ
answers
How
much
and
when?
Average taken
over a year
JAN Feb AprMar May Jun Jul Aug Sep
Quantityrequired
TIME

14. WEEK NO.
1 2 3 4 5 6 7 8
50 0 30 20 0 0 70 20
Master Schedule, Table (desks)
MRP –Desk- Top),Lead time =3, order quantity=100
Requirements 50 0 30 20 0 0 70 20
Schedule
receipts
100
On Hand 60 10 110 80 60 60 60 -10 -30
Planned Oder
Release
100
MRP –Plywood sheets for desk-tops ),Lead time =5, order quantity=250
Requirements 40 100 90
Schedule
receipts
On Hand 160 160 120 120 20 20 20 -70 -70
Planned Oder
Release
250

15. Material Requirement planning
 MRP is a computer program that translates
finished product requirements into time-
phased requirements for each dependent
demand items.
 The Bill of Materials(BOM) one of the three
primary inputs of MRP, is useful because it
is a list of all the assemblies, sub-assemblies,
parts, and raw materials that are needed to
produce one unit of a finished product.

16. MRP Input
MASTER
SCHEDULE
• Relates to product
demand and
timeline.
• What end items
need to be
produced
• When they are
needed
• How much are
needed.
BILL-OF-
MATERIALS FILE
• Relates to product
composition.
• Lists all of the raw
materials, parts,
sub-assemblies and
assemblies required
to manufacture one
item
AN INVENTORY
RECORDS FILE
• Relate to inventory.
• Consist of status
information on an
item sorted by time
period.
• Status information
consists of gross
requirements,
scheduled receipts
and expected
amount on hand.

17. MRP Output
PRIMARY REPORTS
• Include production and inventory planning
and control
• Planned orders - a schedule indicating
the amount and timing of future orders
• Order releases - authorizing the
execution of planned orders
• Changes to planned orders - revisions of
due dates or order quantities/ cancellation
of orders.
SECONDARY REPORTS
• Include performance control, planning,
and exceptions
• Performance-control reports - measure
deviations from plans such as deliveries
and stockouts, as well as providing info
that can be used to assess cost
performance.
• Planning reports - predict future
inventories, procurement contracts and
data for future assessment of material
requirements.
• Exception reports - recognizes
inconsistencies within the report such as
errors in overdue or late orders, etc. pg 661

18. Material Requirement planning
 Requirements
 The benefits of MRP primarily depend on the ability to
maintain up-to-date and accurate information. In
order to implement and operate an effective MRP
system, it is necessary to have:
1) a computer and the necessary software programs
to handle computations and maintain records
2) Accurate and up-to date master schedules, Bills of
materials, Inventory records
3) Integrity of file data.

19. Material Requirement planning

20. Material Requirement planning

22. MRP
 BENEFITS AND REQUIREMENTS OF MRP
MRP enables managers to:
Determine the quantities for a given order size, know when to
release orders for each component, and to be alerted when
items need attention. Other benefits of MRP include:
1) Low levels of in process inventories
2) The Ability to keep track of material requirements
3) The ability to evaluate capacity requirements generated
by a given master schedule
4) A means of allocating production time
5) The ability to easily determine inventory usage by
backflushing.

23. MRP
 BENEFITS AND REQUIREMENTS OF MRP
Backflushing is a procedure in which an end item's bill of
materials (BOM) is periodically exploded to determine the
quantities of the various components that were used to
make the item. The people who are typical users of a MRP
system in a typical manufacturing company are production
managers, purchasing managers, inventory managers, and
customer representatives.
 The benefits of MRP depend primarily on the use of
computer to maintain up-to-date information on material
requirement.

24. Thank you!