Developing a plan for resources within your operation is a must. Without proper or adequate resource planning, your operation may have a much more challenging time managing other areas of your supply chain such as inventory, production, output, etc. Neglecting resource planning will only lead to high inventory cost or unfulfilled on time consumer orders - which will only cost you money in the long run. This is why materials requirements planning (MRP and MRP II) has become essential within a production facility. MRP and MRP II has enabled production managers to efficiently manage materials within production and make it much easier to organize any materials that are waiting to be assembled. While these two softwares are extremely similar, MRP and MRP II have components within them that make them different. In this blog, we will discuss the differences between MRP and MRP II and understand the components that differ them.
Materials Requirements Planning (MRP)
Materials requirements planning (MRP) has functions that pertain to the following:
- Inventory Management - The main objective of a materials requirements planning software is to ensure that materials are available at a moments notice and are being transferred throughout production with ease. This eliminates the necessity for manual-entered data and also ensures that material orders are carried out. MRP also alerts the production facilities when products are ready to be delivered.
- Cost Reduction - In correlation with inventory management, cost is significantly reduced through ensurement of a steady inventory flow, reduced holding and untimely delivery cost, and more. This will ultimately lead to bringing more revenue into the operation.
- Production Optimization - While the overall goal of MRP is to manage materials, it benefits the rest of the system as well. As materials are flowing throughout the supply chain equipment and employees are able to work much more efficiently.
While these components of materials requirements planning (MRP) are beneficial, MRP II is a much more advanced and strategic software that offers key insight into various areas of production. MRP is basically a less complex version of MRP II, in which MRP is able to take the reins in other areas of production.
Materials Requirements Planning (MRP II)
The functions pertaining to materials requirements planning (MRP II) pertains to the following:
- Master Production Scheduling (MPS) - Through creation of a master production schedule, production is easily able to follow the best route available. MPS allows software to easily and accurately predict how much product is needed to be produced within a given time period. This will then effectively combat bottlenecks, inefficient productivity, and other inefficient areas. This will ultimately lead to increased production and revenue.
- Purchasing Management - This feature within the software pertains to the purchasing of any raw materials that are needed for production. This capability is able to effectively purchase materials without manual input, ultimately saving the production manager time. This portion of the software allows for a steady flow of materials throughout production.
- Materials Requirements Planning (MRP) - With MRP II, you receive all of the benefits of material requirements planning (MRP) along with the features of MRP II. This feature is a production planning, scheduling, and inventory control component that effectively manages the overall manufacturing process. This capability is software based and functions without human interaction, which then carries out objectives pertaining to ensurement of product availability, product control, and developing a plan for manufacturing, scheduling, and purchasing.
- Capacity Planning - Utilization of accurate data for demand enables the software to produce a plan for capacity. This plan accounts for a varying demand and the maximum amount of product that can be produced and utilizes an advantageous route for capacity. This portion of the software will save manufacturing operations from high inventory cost and prolonged lead times, ultimately leading to reduced cost within the operation.
Overall, MRP II is a more strategic and advanced version of MRP I and is a much more beneficial option for manufacturers around the globe. While MRP and MRP II are extremely capable systems, there are still areas where these softwares fall short. This is where advanced planning and scheduling software comes into play, in which it can be integrated with MRP or MRP II. Advanced planning and scheduling software generates production schedules for manufacturing operations and enables operations managers to have key insight within their operation. This software ultimately boosts efficiency and fills in the gaps where MRP and MRP II lack.
Advanced Planning and Scheduling Software
Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.
- Create optimized schedules balancing production efficiency and delivery performance
- Maximize output on bottleneck resources to increase revenue
- Synchronize supply with demand to reduce inventories
- Provide company-wide visibility to capacity
- Enable scenario data-driven decision making
Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.