Manufacturing Resource Planning is an efficient method for the effective planning of the manufacturer’s resources. MRP has numerous functions and features.
Some major functions associated with MRP are:
- Business Planning
- Capacity Requirements Planning
- Sales Planning
- Operations Planning
- Other Support Systems and their Planning
The result from this extensive MRP directly enhances the financial reports and business plans among other things. With the help of Manufacturing Resource Planning, you can answer all the “what if” questions related to your business analyses.
Initially, Manufacturing Resource Planning was called Material Requirements Planning. However, many changes and modifications were made in the system. The alterations were up to such an extent that it no longer matched with its original version. Therefore, Oliver Wight coined a new acronym for it, MRP II.
In order to understand MRP II better, let us go through its features, benefits, and uses one by one:
MRP II in Business:
Manufacturing Resource Planning is an entirely modernized and computer-based information system. It is extremely precise and leverages real-time data to create a balance between the incoming and availability of raw material and labor.
MRPII is used to enhance the functionality of the ERP system, which is the Enterprise Resource Planning and also to extend the limitations of Material Resource Planning.
Major MRP II Softwares:
According to our data and analyses, some main MRP II software used widely in 2019 are:
- S2K Enterprise
- Oracle, and so on.
Benefits of MRP System:
Some major benefits of the MRP II System are:
- Gives exact information at the most appropriate time.
- You can gain valuable details about the most suitable time of ordering.
- Gives record of how much raw material is needed to be ordered to the suppliers.
- New orders for raw material can be generated at periodic intervals.
All of the demands of the customers are addressed with the help of this system. It also helps make suitable modifications for potential problems that may arise in the near future.
other benefits of MRP System are:
- More Competitive Team: The workforce becomes competitive and effective at its full potential.
- Enhanced Material Availability: The company expenses are greatly reduced as there is a massive reduction in the inventory. All of this results in a greater bottom-line profit.
- Reduction in Equipment Downtime: This happens in the entire process becomes more streamlined and organized.
- Excellent Customer Service: Accurate and precise information can be given to the customers regarding their delivery of goods, etc. This results in greater customer satisfaction which makes them lifelong loyal customers.
- Improved Data Collection: Your workforce will have more insight into all the ongoing, previous and future processes of the company. This results in quick data analyses.
Features of Manufacturing Resource Planning:
The major development features of MRP II are as follows:
MRP II includes extensive feedback from the shop floor. All the levels from A to Z are covered to streamline the work. Feedbacks are regularly updated.
2. Resource Scheduling:
The system has a scheduling capacity that focuses on the equipment to convert raw material into finished products. The benefit of this feature is that the shop floor can be planned in detail and the plant can be given the required work to perform.
3. Batching Rules:
Batching rules can be included. The major types of batching rules are:
- Lot for Lot: This means that the orders match with the batches. The production is made according to the requirement of the product.
- Economic Batch Quantity: In this, the batch size is calculated to minimize the cost of balancing the setup cost against the stock cost.
- Part Period Cover: This means preparing batches which cover the demand of a fixed period.
4. Purchasing Management:
It is the management of the purchasing process in an organization. This department can be formed by one or more employees. Furthermore, the MRP II System helps ensure orderly management in this process. This helps in the proper management of goods, inventory, and supplies.
5. Standard Costing:
Since the process of business is streamlined and there is no sort of overload anywhere, the costing of the products is also reduced to the lowest so that the customers can comfortably buy them.