There are several attributes that contribute to a smooth production flow of a firm. These factors are dependent on several independent resources.
These have to be carefully aligned and utilized in such a way that it streamlines the overall production flow. In such situations, Manufacturing Resource Planning is used.
Overview of MRP I and MRP II
It is an integral part of an information system that is used by businesses. The goal behind the advent of it is to fix the short comes or constraints of Material Requirement Planning (MRP I).
Material Requirements Planning (MRP I) is one of the leading software-based integrated information systems that boosts the overall performance of a business. Material Requirement Planning is an integrated information system that entirely relies on a sales forecast-based system that is useful in scheduling raw material deliveries and quantities. Aside from all these managerial uses, Material Requirement Planning has been extensively used to precisely predict the amount of human capital, machinery, and IT Infrastructure required to achieve a sales target.
To fulfill the burning requirement of the manufacturing companies, Manufacturing Resource Planning has incorporated the integration of additional data, such as employees and financial needs.
The integrated information system of MRP II concentrates, accumulates, and processes the information in such a way that this information can be leveraged by the third-party for scheduling, design engineering, inventory management, and cost control in manufacturing.
Both Material Resource Planning and Manufacturing Resource Planning are the predecessors of Enterprise Resource Planning(ERP), which is a procedure-oriented methodology in which a manufacturer smartly managed all the critical aspects of his business.
Many large organizations have already developed too many software to assist companies in the proper implementation of Enterprise Resource Planning ERP.
Definition of Manufacturing Resource Planning
Manufacturing Resource Planning is a computer-based integrated information system that can devise the most precise and accurate production schedule by leveraging the real-time data to create a harmony between the arrival of raw material components with the machine and labor availability.
It is often a useful and most relevant tool to enhance the core functionality of the Enterprise Resource Planning ERP system.
The goal behind the advent of Manufacturing Resource Planning is to the extent the capability of Material Resource planning.
By the end of the 1980s, manufacturers and business owners start realizing that they need a specific kind of software that can be easily incorporated into their accounting system and can prophesy the amount of inventory required by a business to accomplish a particular task. MRP II is a software that can effectively address all the requirements of manufacturers. For the sake of maintaining backward compatibility, MRP II contains all the critical features of MRP I.
Real Word Examples of Manufacturing Resource Planning Software
As of 2019, the following vendors are the well-known providers of the MRP II software.
- S2K Enterprise
- Oracle Netsuite Manufacturing Edition
Importance of Manufacture Resource Planning Software
Automated software of MRP II allows the user to,
- Acquire valuable details about the right time of ordering.
- How much quantity of raw material he needs to order to the suppliers.
- Generate orders for raw material input. Periodic-arrangement of all the orders.
All of these are crucial to address the ever-growing demands of customers and the whole manufacturing process.
Automated software for Manufacturing Resource Planning regularly calculates the requirement of raw materials, and all the calculations performed by the MRP II is entirely based on the order forecasts.
Additionally, this automated software for Manufacturing Resource planning also makes some changes to offset the potential issues that may arise in the upcoming future. This attribute of MRP II makes it a way more effective and accurate than the traditional management system.
Few Critical Aspects
Now I’ll be listing the critical aspects of manufacturing resource planning categorically.
MRP II glean valuable feedback from the production floor and store this information more robustly and systematically. To ensure the regular up-gradation of the next run regularly, MRP II integrates the stored information to all levels of the schedule.
Inventory management control includes a scheduling capability that strongly emphasizes the significant resources, such as plant, machinery, and raw materials, which are incredibly crucial in the production of finishing goods. MRP II generates the most precise and accurate data that can assist an individual in gaining firm control over the manufacturing process
Software Extension Capabilities
Aside from the inventory and recovery control, different other programs also incorporated into the MRP II. Some of these programs specifically designed to make the scheduling process way more useful than ever before. MRP II also comes with the in-built option for sale ordering processing. Stock recording and cost management accounting all lie in the realm of Manufacturing Resource Planning. All of the above attributes embedded in the company’s primary database system.
MRP has in-built advanced planning capabilities that include:
- Minimize the Panning activities
- Automated computerize ordering of raw material for the production of finishing goods
- Hard and soft allocation
Optimizing the Labor Requirement
Automated software for the Manufacturing Resource Planning precisely calculates the amount of labor required to meet daily, weekly, or monthly labor schedules. MRP II smartly manage the labor based on qualification and the relevant skill sets.
MRP II is useful when the initial data entered must be correct and accurate. It is quite evident from the past track record that the companies that develop and deploy an automated software system for Manufacturing Resource Planning strongly recommend their users to enter only the correct and accurate data. That helps in utilizing the full potential of MRP II.
Benefits of Manufacturing Resource Planning
These are the potential benefits,
- Undoubtedly, MRP is an innovative and highly competitive tool that has completely revolutionized the traditional method of stock control and management.
- A fully automated software for the Manufacturing Resource Planning framed an effective and the most consistent production schedule, which can allow any company to smartly manage its operating expenses by reducing the money, time, and human capital.
- Planning with the aid of an automated software MRP II makes a company way more efficient than ever before. Thus, in simple words, we can say that MRP II acts as a useful tool for profit optimization as it reduces unnecessary expenses.
- Data gleaned through MRP allows the companies to frame an effective strategy for the future, and prophesying how their overall strategy can affect the overall profitability of the business.
- The automated system of MRP provides a piece of more robust and detailed information that can be easily leveraged by any company to accomplish its core functions, such as planning, effective decision making, and production.
The most prominent manufacturing business model that benefits from the Manufacturing Resource Planning Integrated information system are those that involved many assembly lines. Small and medium scale businesses or SMEs can also leverage MRP II to enhance their overall production capacity and revenue as a result.