Manufacturing Resource Planning (MRP II)

MANUFACTURING  RESOURCE PLANNING  (MRP II)

The initial versions of MRP in the early 1970s were limited to the planning of purchase orders and factory work orders and did not take into account such issues as capacity planning  or feedback data from the factory for shop floor control. MRP was strictly a materials and  parts planning tool whose calculations were based on the MPS. It became evident that  MRP should be tied to other software packages to create a more integrated PPC system.  The PPC software packages that evolved from MRP became known as manufacturing resource planning, or MRP II, to distinguish' it from the original abbreviation and perhaps to  suggest that it was second generation; that is, more than "just" MRP.

 Manufacturing resource planning can be defined as a computer based system for planning, scheduling, and controlling the materials, resources, and supporting activities needed to meet the MP& MRP II is a closed loop system that integrates and coordinates all of the major functions of the business to produce the right products at the right times, The term "closed loop system" means that MRP II incorporates feedback of data on various aspects of operating performance so that corrective action can be taken in a timely manner; that is, MRP II includes a shop floor control system.

Application modules typically provided in a high end MRP II system include the following:

 Management planning. Functions included in this module are business strategy, aggregate production planning, master production scheduling, rough cut capacity planning. and budget planning

 Customer service. Typical components in this module are sales forecasting, order entry, sales analysis, and finished goods inventory.

   Operations planning. This is the MRP module. enhanced with capacity requirements planning. The output consists of purchase order and work order releases.

   Operations execution. This includes purchasing, production scheduling and control, \\tIP inventory control, shop floor control. and labor hour tracking.

   Financial functions. These include cost accounting, accounts receivable, account, payable, general ledger. and payroll.

In effect. MRP 11 consists of virtually all of the functions in the PPC system diagramed in Figure 26.1 plus additional business functions that are related to production. Software vendors continue to add new features to their MRP II packages to gain competitive advantages in the market. Some of the applications that have been added to recent generations of MRP II are in the following areas: quality control, maintenance management, customer field service, warranty tracking, marketing support, supply chain management, distribution management, and product data management. Product data management (PDM) is closely related to CAD/CAM and includes product data filing and retrieval, engineering change control, engineering data capture, anu other features related to product design. In fact, the POM area has emerged as a separate software market, although available commercial packages are designed to integrate with MRP II.

New names have been coined in the attempt to differentiate the latest generation of MRP II software from its predecessors. Some of the newer terms include:

   Enterprise resource planning (ERP). Software packages described by the term ERP have the traditional MRP lf modules. Use of the word "enterprise" in the title denotes that these packages extend beyond manufacturing to include applications such as maintenance management, quality control. and marketing support.

   Customer oriented manufacturing management systems (COMMS). This term competes with ERP but the definition is similar. COMMS software packages are organized into three major phases: (1) planning, (2) execution, and (3) control. Modules in the execution phase are known as manufacturing execution systems, which have become recognized on their own.

   Manufacturing execution systems (MES). As mentioned above, this name refers to the execution phase of COMMS. MES typically includes production scheduling, quality control, and material handling modules.

   Customer oriented management systems (COMS). This term was coined by one of the originators of COMMS who started up his own commercial venture to market software and services for a more general clientele than only manufacturing. Hence, the word "manufacturing" was dropped from the title. What remained was customer oriented management systems. Application modules in COMS are again similar to those in ERP and COMMS.

Commercially available MRP II packages number in the hundreds and range in price from several hundred dollars to several hundred thousand dollars. depending on features and support delivered by the software vendor. The cost of the software itself is only a portion of the total cost that may Ultimately be paid by the user company. Other costs include: (1) training of user company personnel.in the operation of the specific MRP II package, (2) interfacing the MRP II package with other software and data bases in the user company, and (3) reprogramming the MRP II package to customize it to other user company's systems