Page 83 - DCAP302_ENTERPRISE_RESOURCE_PLANNING

Unit 4: Manufacturing Perspective of ERP

4.6 manufacturing resource planning (mrpii) notes

Manufacturing Resource Planning (MRP II) is defined by APICS as a method for the effective
planning of all resources of a manufacturing company. Ideally, it addresses operational planning
in units, financial planning in dollars, and has a simulation capability to answer “what-if”
questions and extension of closed-loop MRP.
Manufacturing Resource Planning (or MRP2) - Around 1980, over-frequent changes in sales
forecasts, entailing continual readjustments in production, as well as the unsuitability of the
parameters fixed by the system, led MRP (Material Requirement Planning) to evolve into a new
concept : Manufacturing Resource Planning (e.g. MRP 2)

MRP II is not a proprietary software system and can thus take many forms. It is almost impossible
to visualize an MRP II system that does not use a computer, but an MRP II system can be based
on either purchased–licensed or in-house software.

Almost every MRP II system is modular in construction. Characteristic basic modules in an MRP
II system are:
1. Master Production Schedule (MPS)

2. Item Master Data (Technical Data)
3. Bill of materials (BOM) (Technical Data)
4. Production Resources Data (Manufacturing Technical Data)
5. Inventories and Orders (Inventory Control)
6. Purchasing Management

7. Material Requirements Planning (MRP)
8. Shop Floor Control (SFC)
9. Capacity planning or Capacity Requirements Planning (CRP)
10. Standard Costing (Cost Control)
11. Cost Reporting / Management (Cost Control)

Benefits of MRPII

1. MRP II systems can provide:

(a) Better control of inventories
(b) Improved scheduling
(c) Productive relationships with suppliers
2. For Design / Engineering:

(a) Improved design control
(b) Better quality and quality control
3. For Financial and Costing:
(a) Reduced working capital for inventory
(b) Improved cash flow through quicker deliveries

(c) Accurate inventory records
(d) Timely and valid cost and profitability information

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