3 - Manufacturing resource planning systems

Abstract

Material requirements planning (MRP or MRP I) is an inventory planning and control system. It was designed to replace previous techniques for managing inventories based on reorder points and economic order quantities.The problem with these systems was that they were backward looking and resulted in an excessive inventory of obsolete stock. In contrast, requirement was getting the right quantities of supplies and components to the right place at the right time. Therefore, the concept of MRP was extended to cover additional areas of the business and the enlarged version was developed, called manufacturing resource planning (MRP II) that enabled systems to examine the engineering and financial implications of future demands on business and the material requirements implications. MRP that was initially a system, forms the core module of an MRP II system. Furthermore, this chapter emphasizes how these MRP systems have evolved from automated methods for process planning and inventory control to company-wide information systems encompassing all functions. There is also a wide range of commercially available software that offers MRP II capability. A strategic analysis of the organization's requirements is necessary to select the system that is best suited to fulfil the needs.