MRP II (Manufacturing Resource Planning), manufacturing resource planning, is a concept that has begun and will continue to play an essential role in enabling the integration of the product supply chain, and also offers a framework for a formal planning system And control.
In technical terms MRP II offers little more than a computerized system for traceability of the work order and materials. But associated with Human Resources strategies, MRP II can be appreciated for what it is, this is a powerful set of tools for a company to achieve important results.
MRP II has been defined as an effective planning method of all resources for a manufacturing company. Its mechanism comprises a variety of functions associated with each other. These are business planning, Sales and Operations Plan, Master Production Schedule, Materials Planning, Capacity Planning, and workshop associated execution systems.
To close the circuits and provide efficient integration, financial management is also included within MRP II. Through the incorporation of financial forecasting functions, the sales and operations sector works more efficiently.
The questions that any company considering MRP II implementation should ask are:
- Are there strong ties with suppliers and customers? Are there delayed or lost work orders? Are there excessive overtime payments? Are there large stocks of raw materials and finished products? Lead time is high compared to the competition? Are they "hot lists" and "fire extinguishing" common practices? Are there cases of lack of raw materials or finished products?
If any of these questions is yes, then MRP II is a suitable tool.
Traditionally, the effectiveness and engagement of MRP II has been rated on a three-tier scale: Class A, Class B, and Class C. For MRP II to be truly effective, the company must achieve and maintain a Class A rating. Class A has associated a series of procedures and precision requirements.
The software for the MRP II is available from several vendors and can be run on a variety of computers. With well-placed, accurate data files, the main driving force of an operating system for MRP II is the master production schedule, which determines which products will be manufactured in what time frame. The master production schedule arrives at intervals, based on business planning information input and planning ability. The MRP II system needs to be fail-proof to follow the current manufacturing schedule (due to production, waste, material shortages, etc.). When discrepancies occur, the production schedule may require modifications to reflect the consequences of the deviation.
Manufacturing resource planning (MRP II) is rapidly displacing traditional material resource planning (MRP) as an effective computer-based tool for manufacturing operations. MRP II has the ability to significantly reduce production costs and improve quality. MRP II is more than a software program; it is a way of conducting business.
As with all computer-based systems, the MRP II relies on accurate and timely data.
Brief description of MRP II (Flowchart)
Source: NARASIMHAM Seetharama L., MCLEAVEY, Dennis W. and BILLINGTON Peter J. Production planning and inventory control. Page 352
