Tuesday, September 27, 2011

What is MRP? MRP I & MRP II Defined

Material Requirements Planning (MRP I)

Following the strict APICS definition, MRP (more accurately MRP I, read MRP-one) is a system that helps a manufacturer plan their purchasing and production activities, and when necessary, create the required purchase orders and production orders in time to meet customer commitments.
This leads to the Great Paradox of Manufacturing:
  • An inventory control system helps you maintain an inventory of your materials.
  • An MRP system helps you maintain no inventory of your materials.

Without an MRP system, manufacturers typically react by purchasing material they might need. With an MRP system, manufacturers purchase material they definitely do need. Which do you think is a better use of limited financial resources?

Many manufacturing systems combine the distinct functions of MPS (Master Production Schedule) and MRP into one called MRP. It is possible to create an MPS without an MRP, but not possible to create an MRP without an MPS. If you are convinced that the software you are considering performs the functions described here, then strict adherence to the terminology is not that important.

Manufacturing Resource Planning (MRP II)

As the term implies, Manufacturing Resource Planning (aka MRP II, read MRP-two), is an extension to MRP I that goes far beyond planning and acquiring the materials needed for production, but every other resource related to the successful operation of a manufacturing plant, including people and machinery.

Some impressive demonstrations can be made by manufacturing software vendors selling “fix all your problems with one click” systems. In our opinion, MRP II requires a level of sophistication far beyond that of most of our prospective customers. Ford Motors and Caterpillar depend on MRP II to run their manufacturing operations. MRP II is a big job – one best reserved for the big boys.

Few low-end to mid-ranged manufacturing systems offer MRP II, but if they do, beware. Systems that perform real MRP II functions cost hundreds of thousands, often millions of dollars. If the system you are looking at claims MRP II capabilities for far, far less turn your fluff detector to stun.

MISys Manufacturing v5.0

MISys Manufacturing is best described as an MRP I system, although it does have a few MRP II-like features, including the powerful Capacity Manager. This tool analyzes the load every active production order is placing on available resources (work centers) and displays where and when capacity overloads are occurring.

Using the tool, you can manually reschedule the offending production orders to take better advantage of available resources.

For a few hundred thousand dollars more than what MISys costs, an MRP II system might do this automatically, but if you disagreed with the planning decisions it made, you'd think you'd be better off with MISys Manufacturing.

Invest the next ten minutes of your time and take the 6-step tour. Download the MISys Manufacturing brochure, fact sheets, watch the demo videos, get a price estimate and more.

Visit www.misysinc.com

Related Video: "What is MRP? Why do I need MRP? A demo with MISys Manufacturing & Sage 50 Quantum Accounting"

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