MRP is an abbreviation for Material Requirements Planning – a system designed in the ’70s, which allows detailed planning of procurement requirements for raw materials and materials used in production.
Material requirements planning (MRP I) was an early replica of the vision of integrated information systems. MRP I information systems helped managers determine the quantity and timing of raw material purchases.
Over time, this system was no longer sufficient, as it did not cover all the critical data necessary for planning and monitoring production and thus the need arose to integrate all aspects of the manufacturing process, in a way that facilitates the best decisions. by production managers, to increase the efficiency of production and assembly lines.
Thus was born, in the early ’80s, the concept of Manufacturing Resource Planning (MRP II), a system that integrates all the elements involved in the production process: human resources, production equipment and raw materials.
The functionalities of the production planning and tracking systems (MRP II) start with the planning of the material requirements, which are determined based on the sales forecasts or based on the orders coming from the clients. These applications use a main production schedule, breaking down the specific plans on each production line.
While MRP I allows the coordination of the purchase of raw materials, MRP II facilitates the development of a detailed production program that takes into account the capacity of the machine and the workforce, planning productions according to the availability of materials in the warehouse or the arrival of purchased materials. from suppliers.
The data about the production cost, including the necessary execution time on each machine, the working time of the operators and the materials used, as well as the number of finished products are provided by the MRP II system to the departments of interest: production, commercial, logistic or financial accounting.
The main components of an MRP II system:
Module for production planning – Aims to present a very detailed load of a factory’s resources (machinery, equipment, human resources)
Warehouse management module – Presents complete traceability on all categories of raw materials. The stock is updated in real time according to the consumptions in the production orders.
How to track production
Provides complete traceability throughout the production chain, from the first technological operation to the last, using mobility and barcode technology, NFC or RFID. Thus, each operation is confirmed in real time.
MRP II is an integrated information system that can design the most accurate production schedule by using real-time data to create an intelligent link between raw material components and equipment and labor availability. The automated software for manufacturing resource planning regularly calculates the need for raw materials, and all calculations performed by MRP II are based entirely on order forecasts. All this data is crucial to meet the growing demands of customers and the entire manufacturing process.
MRP II is an innovative and highly competitive tool that has completely revolutionized the traditional method of inventory control and management. A fully automated software for manufacturing resource planning, which has framed an efficient production program and which can allow any company to intelligently manage its operating expenses by optimizing operational processes, time and human capital. The data collected through MRP allows companies to develop an effective strategy for the future and predict how their overall strategy may affect the overall profitability of the business.
Business models that benefit from the integrated information system for manufacturing resource planning are those that involve many assembly and production lines, but small and medium enterprises can also use MRP II to increase their production capacity, revenues and for optimizing operational processes.