Manufacturing resource planning

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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.

This is not exclusively a software function, but a marriage of people skills, dedication to data base accuracy, and computer resources. It is a total company management concept for using human resources more productively.

1 MRP II is not
2 MRP II involves an entire company
3 Without MRP II
4 See also

[edit] MRP II is not

Many items on this list can be part of an MRP II, but are not solely what it is.

a computer system
manufacturing control system
inventory reduction plan
complex
- Some of the software can be complex, but the user interaction controls do not need to be.
unique to a few industries

[edit] MRP II involves an entire company

Management business rules for strategic planning can be set, and enforced by MRP II. Sales and Marketing can incorporate sales goals that fit material and capacity constraints. Relationships can be developed with vendors to improve purchasing just in time. Inventory shortages can be seen before they happen, with communications to customers to get approval of substitutions that will get a part that does the same thing, on schedule. Accounting and finance departments get accurate costs, and predict cash flow. Engineering dept must audit and feed in accurate data on production methods in detail, such as bill of material, rates and lead times. Quality Control gets audit trails to back track the reason behind rejection of some work by those inspectors, who were responsible for the unacceptable piece of work.

[edit] Without MRP II

What can happen at a company that is not using MRP II, or has failed to meet all the criteria so that it can work properly.

Orders, promised to customers on certain dates, are often not fulfilled, and the sales staff is aware of this only when the customer calls to ask about the order.
Some data is deliberately entered to the system as due 2 weeks before really needed, because everyone knows the factory has a serious backlog.
People heavily rely on hot lists and shortage lists.
People place heavy reliance on paperwork that does not go through the computer system.
Inaccuracies in inventory cause production problems.
Money gets tied up in unwanted inventory, reordered because of engineering inaccuracies.
Expensive rush orders are placed to replenish inventory the computer did not know was needed, because engineering changes were not processed correctly, data was not kept current.
When management locates inaccuracies in inventory, past due, deviations, wrong prices ... it can be almost impossible to figure out how come they got that way, and how long they have been that way.
Profit picture is wrecked by inaccuracies in bill of materials and transaction reporting.
Setup of machinery to change to a different product is time consuming, but production runs get interrupted for higher priority needs, that were not known to the work force at time of earlier change in setup.
At end of month, there is a huge workload for people to clean up the system.
Overtime is usually unplanned. People who were expecting to leave at 4.30 pm, or whenever shift changes, might be asked at 2.30 pm to stay late a couple hours, so then there is a mad stampede to the telephones to arrange changes to day care and other family commitments that must be delayed.