MRP II: What Does It Mean for Your Business?
What is MRP II?
MRP II stands for Manufacturing Resources Planning. It's a system that helps businesses plan and manage their manufacturing resources. This includes things like raw materials, production equipment, and labor. By using MRP II, businesses can more effectively use their resources to produce products.
Where Did MRP II Come From?
MRP II is an extension of the original materials requirements planning (MRP I) system.
MRP was optimized in the 1960s after studying the manufacturing processes used by the Toyota company in Japan. Production was known to operate at its maximum capacity when materials for products were available in quantities exactly needed for orders, commonly referred to as Just in Time (JIT) inventory, and when such orders could be scheduled and delivered without delay.
By 1981, MRP had been adopted by more than 8,000 companies worldwide, and by the late 1980s, the software had evolved to use the more complex version of MRP II, introduced by Oliver Wright and George Plossi.
Why is MRP II important?
The benefits of MRP II are based on the understanding that peripheral influences can significantly impact a production environment's efficiency.
MRP II takes the concept of Just in Time beyond simple inventory and extends it to a Just in Time calculation of the availability and capacity of workforce and machines, coordination for the arrival of raw materials, and so on.
There are additional reasons why MRP II is essential for manufacturing businesses. Here are just a few:
- It can help businesses save money by reducing waste and improving efficiency.
- MRP2 can help businesses improve the quality of their products by ensuring that all resources are used effectively.
- It can help businesses better manage their inventory levels by ensuring that materials are available when needed.
- Finally, MRP II can help businesses improve customer satisfaction by ensuring that products are delivered on time and meet customer expectations.
How does MRP II work?
MRP II is a computer-based system that uses information from various sources to generate plans for manufacturing resources. These plans are then used to manage and coordinate the use of resources.
MRP 2 systems are built in a modular way. Typical modules that are part of an MRP 2 system are:
- The Master production schedule (MPS), or the Main Production Plan.
- The articles database
- The Bill of Materials (BOMs)
- The production cycles (Routings)
- The stock situation
- Purchasing Management
- The Material Requirements Planning (MRP I)
- The Shop floor control, or the production order management system.
- Capacity planning that is the resource planning system.
The MPR logic remains the heart of the system. However, the following features have been added to MRP II:
- Support in MPS activities with the ability to verify the congruence with planning aggregate for families of products.
- A CRP (Capacity requirement planning) module that will compute, based on planned manufacturing orders and orders running on the shopfloor, the workload on the various production work centers (bottlenecks).
- Shopfloor Order Execution monitoring (PAC or Production activity control)
We will focus on the CRP and the PAC modules.
1. Capacity requirement planning
The CRP analysis allows you to check the fulfillment of capacity constraints regarding the availability of machines and labor. It requires accurate knowledge and representation of the products' manufacturing cycles and the capacity of the individual production work centers (machines and work shifts).
The load calculation for each production work center requires scheduling the single operations of the working cycle. In many MRP 2 systems, this is done with "infinite capacity" (assuming that a production work center is "always" available).
Modern MRP 2 systems, such as Beas Manufacturing, can work with Finite Capacity Scheduling. These systems consider the actual capacity of the production resources and shop floor constraints.
In the event of a breach of capacity constraints or an excessive load of a production work center, the CRP attempts a load optimization using, for example, a mathematical programming model (APS - advanced planning and scheduling).
The information collected by the CRP is essential for two reasons:
- It allows you to verify the compliance with the production planning and, if necessary, make adjustments (for example, by changing the manufacturing cycle of a product or redistributing some operations on other machines).
- It provides input for the next step: Production Activity Control.
2. Production activity control
Production Activity Control (PAC) modules have a dual function:
- Provide information to the shop floor about the planned production.
- Collect information from the shop floor on the completed production to transfer this information to the CRP module responsible for planning the production.
Providing information on the shop floor means essentially determining and updating priorities of manufacturing orders to allow the sequencing of activities (which can be achieved with the Beas Manufacturing pool report module).
The PAC module also collects information from the shopfloor concerning the progress of the manufacturing orders (can be done with Beas Manufacturing terminal and web apps for reporting times and completed quantities).
The information collected by the PAC is essential for two reasons:
- First, it allows to update the expected finish date of a production order and replan other production orders that were waiting for their completion.
- Second, this information is used by the CRP module to re-optimize production loads considering the new situation.
What is the difference between MRP I and MRP II?
The main difference between MRP I and MRP II is that MRP II systems are more complex. They require more data and take longer to implement. However, the benefits of MRP II make it worth considering for businesses that want to improve their manufacturing operations.
MRP II also includes features such as capacity planning and shop floor order execution monitoring that MRP I does not have. These features make MRP II even more powerful than MRP I in managing manufacturing operations.
MRP II has effectively replaced MRP I software. Most MRP II systems provide all the functionality of an MRP system and offer core production planning, bill of materials (BOM), and inventory tracking.
MRP II can consider variables that MRP is not taking into account, including machine and staff availability, providing a more realistic and holistic representation of a company's operational capabilities.
Many MRP II solutions also offer simulation capabilities that allow operators to enter variables and see the effect downstream (what if scenarios).
In simple terms:
MRP I included the following three main features:
- Bill of materials
- Inventory monitoring
MRP II includes all those mentioned above, plus the following:
- machine capacity planning
- production activity control in real-time
MRP II is more comprehensive and takes a holistic view of the manufacturing process. It includes features that help planners optimize production plans and monitor progress on the shop floor.
By taking a holistic view of the manufacturing process, MRPII systems can optimize production plans and monitor progress in real-time. This allows businesses to quickly adapt to demand changes and avoid potential supply chain disruptions.
Do you think your business could benefit from MRP II?