What Is Manufacturing Resource Planning (MRP II)?

What Is Manufacturing Resource Planning (MRP II)?

Let me explain MRP II directly: it's a process you use in business to figure out and assign the resources needed for efficient manufacturing.

It brings together the data collection and input from your company's team with the power of computer processing.

MRP II is built to centralize, integrate, and handle information so you can make effective decisions on scheduling, design engineering, inventory management, and cost control in manufacturing.

Key Takeaways

You should know that MRP II is an integrated information system that businesses use to enhance the manufacturing process.

It determines all the resources required for a manufacturing project and allocates them for maximum benefit.

MRP II extends materials requirement planning (MRP), and both are predecessors to enterprise resource planning (ERP).

Understanding MRP II

MRP II is a computer-based system that generates detailed production schedules using real-time data.

These schedules coordinate the arrival of component materials with machine and labor availability, ensuring your manufacturing process runs smoothly.

Background

MRP II extends the original MRP, which was one of the first software-based integrated systems to boost business productivity.

The MRP system based scheduling of raw material deliveries and quantities on sales forecasts, assuming certain machine and labor needs to meet those forecasts.

By the 1980s, manufacturers saw the need for software that linked to accounting and forecasted inventory, and MRP II filled that gap.

ERP Predecessors

You can use MRP II standalone or as a module in a larger ERP system.

ERP is how a company, especially a manufacturer, coordinates and manages key business parts to meet objectives effectively.

Both MRP and MRP II are viewed as forerunners to ERP.

An ERP system integrates planning, purchasing, inventory, sales, marketing, finance, and human resources.

ERP is commonly software-based, with many large applications available to implement it.

Fast Fact

MRP II went beyond MRP's material planning by including workforce planning, capacity scheduling, and cost management.

Examples of MRP II Software

MRP II isn't proprietary; various providers offer it.

MRP II vs. MRP

MRP II has largely replaced MRP software because most MRP II systems include all MRP features plus more.

Beyond master production scheduling, bill of materials (BOM), and inventory tracking, MRP II covers logistics, marketing, and general finance.

MRP II accounts for variables like machine and personnel capacity that MRP ignored, giving a more realistic view of your company's operations.

Many MRP II solutions let you simulate by entering variables to see downstream effects, which is why it's called a 'closed-loop' system.

MRP had three main functionalities: master production scheduling, product structure records, and inventory status records.

MRP II adds to those with machine capacity planning, demand forecasting and management, input/output control (quality assurance), and general accounting.

Manufacturing companies still widely use MRP II systems today, either standalone or within ERP systems, which succeed MRP II.

ERP suites go beyond manufacturing to include human resources, customer relationship management, and enterprise asset management.

What Is the Difference Between MRP and MRP II?

MRP II includes all MRP functionality and more, so it has replaced MRP.

Is MRP II Software Based?

Yes, all MRP II systems run on software, but your employees gather and input data for it to use, and they monitor the results.

What Is the Difference Between MRP II and ERP?

ERP is broader than MRP II, covering areas outside manufacturing like human resources and customer relations, with MRP II as one component.

The Bottom Line

MRP II is a resource planning system that manufacturing businesses use for a delay-free, efficient, and successful manufacturing process.

It replaced the simpler MRP and is part of even broader ERP systems as one component.