MATERIAL RESOURCE PLANNING
Posted on 2020-11-27
MRP Systems have been revolutionized throughout time. From its first phase which is known as MRP-1 or Material Requirements Planning to more enhanced functionalities, popularly called MRP-2 or Manufacturing Resource Planning/Material Resource Planning.
Let’s take a look at the brief history of MRP
- Mid 1960’s: The term MRP has been created by a researcher at IBM in a research paper. A simple model to allow for just-in-time inventory has been documented.
- Mid 1980’s: The Dawn of MRP-2. This was popularized by Oliver Wight to enhanced MRP-1, supplying additional functionalities including finances and general accounting, demand forecasting for inventory requirement, machine and labor capacity planning, and quality assurance.
- Early 1990’s: As MRP-2 widened to include more components of the entire organization: project management goals, financing abilities, staffing capability, and more. ERP best known as Enterprise Resource Planning has been popularized.
MRP-1 vs MRP-2
| MRP-1 | MRP-2 |
| Material Requirements Planning | Manufacturing Resource Planning/Material Resource Planning |
| Plan the needs for materials | Plan the needs for resources |
| It comprises only the manufacturing area | It includes the entire organization |
| It is an open system | Closed-Loop Manufacturing resource planning |
| It responds to what, how much, and when to acquire materials | It responds the same as MRP-1, and also how much and when will be produced and what are the available resources |
| Improves the materials and productions scheduling | Improves productivity |
Benefits and Application of MRP:
To assist manufacturers dealing with production planning, scheduling, and inventory control. Material Resource Planning has been widely used as a manufacturing management system to assist their operations.
The advancement of data technology has also elevated MRP into a vital production tool. Here are the top 8 known benefits of MRP system:
1. Inventory Control
2. Purchase Planning
3. Production Planning
4. Work Scheduling
5. Resource Management
6. Data Management and Documentation
7. Economic Purchasing
8. Time- saving
NXPERT MRP
Three fundamental questions compose MRP:
1. What to Order?
2. When to Order?
3. How much to Order?
N-XPERT has interconnected the entire organization from Production Planning/ MPS (Master Production Schedule) to Inventory, not just the manufacturing alone. This helps them in monitoring their operations while considering other branches of their business.
Figure 1. NXPERT Version MRP v.1
Figure 2. NXPERT Version MRP v.2
Production Planning
Planning determines how many end items should be made and when should it be ready. NXPERT has this calendar feature where Planning can clearly supervise and plot their planning schedule.
BOM (Bill of Materials)
A product cannot be made if there are no materials. A separate view is also provided in NXPERT where the list of materials can be seen.
Being able to determine How’s and What’s creates a BOM Explosion. As each product needs different materials. This means that it exhibits all components from the highest level down to the lowest.
Inventory
Inventory mainly focused on the availability of the resources. This basically asks the question: How much material do we have?
NXPERT can calculate the gross requirements with respect to the quantity of the products vs the materials needed.
Integral to Other Systems
Apart from those mentioned above which has been linked with MRP.
N-XPERT MRP System has integrated other systems such as:
- Finance is associated with accounting systems and has a vital role for planning. Production
- The production has linkage to production systems. This involves Machine planning and maintenance. Just like Finance, this also takes an indispensable role in terms of Planning.
With all those fundamental divisions vital for MRP Calculation. NXPERT has this beneficial highlight that allows all information to be accessed. From Planning to Inventory. This is also displayed in real-time, thus, allowing all essential statistics to be updated.
For more information, please visit our NXPERT page or you may log your inquiries on our inquiry page to contact our team.
References:
Jonathan Davies (January 23). Top 8 benefits of MRP systems for manufacturers. https://www.winman.com
Karl (2020, February 11) Material Requirements Planning and Manufacturing Resource Planning difference. https://manufacturing-software-blog.mrpeasy.com
Haley Boehm (2020, July 01) The Difference Between MRP-1 and MRP-2. https://softwareconnect.com
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