Manufacturing Resource Planning II

Manufacturing resource planning (MRP II) optimizes resource acquisition, storage, and deployment in production. Integrated with advanced software, it minimizes inventory, reduces costs, and ensures efficient scheduling for on-time delivery in modern manufacturing operations.

What is MRP II?

Production resources may include raw materials, components from suppliers, production equipment and personnel, or spare parts – any resource needed to complete the production of a finished good. Manufacturing resource planning is abbreviated "MRP II" (or "MRP 2") to distinguish it from material requirements planning (MRP I). Manufacturing resource planning 2 encompasses all the capabilities of MRP I, which focuses on a manufacturer's inventory of raw materials and supplied components. MRP I uses inventory data, production order and bill of materials (BOM) data to calculate the quantity and timing of purchases of additional incoming goods.

Manufacturing resource planning is handled in modern manufacturing operations management (MOM) systems by advanced planning and scheduling (APS) software. Advanced planning and scheduling software eliminates much of the manual data entry that has accompanied older approaches to manufacturing resource planning. It also enables the MRP II system to manage highly diverse product portfolios under stringent customer delivery requirements, complex resource allocation scenarios and last-minute change orders.

Manufacturing resource planning software calculates and updates material needs based on actual orders and order forecasts. The complexity of manufacturing operations and scheduling has increased dramatically in recent years due to growing product and supply-chain complexity, globalization, mass customization and other factors. As a result, the large numbers of variables and data points to consider in MRP software have caused many manufacturers – even small and mid-size businesses – to migrate from paper-based, spreadsheet and homegrown MRP tools to integrated digital tools such as advanced planning and scheduling.

Manufacturing resource planning relies on the concept of "dependent demand," which refers to the need for a raw material or intermediate component dependent upon the demand for the finished product. A manufacturer will forecast demand for a particular finished product – considered an “independent demand” because it arises from an external source, typically the customer or a make-to-stock order – and MRP software calculates the demand for materials based on this forecast.

The purpose of manufacturing resource planning today is often tied to just-in-time scheduling (JIT) and just-in-sequence (JIS) methodologies, which seek to minimize both inventory levels and the amount of time a material remains in storage or stationed near the processing equipment that will employ it. Such strategies must also ensure sufficient inventory is present to avoid any shortfalls or production stoppages.

The output of manufacturing resource planning software answers the questions about acquisition, storage and deployment, including:

When to order each material
How much to order
With which supplier to place each order
Where to store inventory
When to move material (and how much) from storage to the production line

Manufacturing resource planning also can be used to accommodate changes in supply or demand. Information about the impact of a natural disaster on a supplier, for example, can be accounted for in the manufacturing resource planning system so that an adequate supply is available when needed.

Related products: Opcenter Advanced Planning and Scheduling

Understand the benefits

Minimizes inventory footprint

Precisely calculate material needs based on demand forecasts, optimizing procurement, and reducing excess inventory levels.

Reduces inventory management costs

Minimize excess inventory, streamline procurement processes, and optimize resource allocation, resulting in more efficient inventory handling.

Minimizes production line idle time

Synchronize material availability with production schedules, ensuring continuous workflow, and minimizing disruptions, thus maximizing productivity.

Reduces spoilage and material waste

Optimize inventory levels, ensuring just-in-time delivery of materials, and minimizing overproduction, thereby minimizing the chances of material degradation or obsolescence.

Lowers production costs

Improve resource utilization, minimize inventory holding costs, reduce production downtime, and streamline overall manufacturing processes, resulting in increased efficiency and reduced expenses.

Improves on-time delivery

Efficiently schedule production, ensuring timely availability of materials, and minimizing delays in the manufacturing process, thereby meeting customer deadlines consistently.

MRP software functionality

Manufacturing resource planning software uses information from bills of materials (BOMs), bills of process (BOPs), product demand forecasts, customer orders, the master production schedule (MPS) and supplier lead time and capacity. It also takes into account:

Production line capacity
Production rate
Availability and training/certification of manufacturing personnel
Production equipment availability
Production equipment maintenance requirements

Based on these inputs, MRP software calculates needs and prompts the creation of purchase orders for incoming goods.

Manufacturing resource planning conducted on a modern advanced planning and scheduling system enables the planning team to generate plans and schedules in both make-to-order and make-to-stock environments.

To enable visualization of the full production schedule and resource allotment, MRP II software provides interactive schedule visualization, displaying data as stock profile graphs and capacity usage graphs. Changes made on these graphs are automatically reflected on the master production schedule (MPS).

MRP II software tracks inventory levels and resource deployments. As materials are consumed or incorporated into finished products, and as demand and orders change, manufacturing resource planning recalculates need and adjusts material orders as needed.

Rather than reacting to supply or demand changes when they occur, modern manufacturing resource planning systems also allow manufacturers to examine “what if” scenarios that enable them to create plans for adjustments and contingencies.