Manufacturing Resource Planning (MRP) is a master plan that covers all resources of a manufacturing company, with MRP II being an improved version that includes financial planning. It combines software and human decision-making, and includes elements such as supply chain management, capacity planning, and financial management. MRP II has given way to Enterprise Resource Planning (ERP), which uses digital tools to aid in decision-making processes.
Manufacturing resource planning is a term for a kind of “master plan” that includes all the resources of a manufacturing company. Those in the planning community identify modern manufacturing resource planning as MRP II, which has some additional improvements over the original MRP, or Materials Requirements Planning, which had a more limited scope primarily related to the use of materials . As a guide for master planning, MRP II is useful in any business that includes a manufacturing element.
Manufacturing Resource Planning is defined by APICS, originally the American Production and Inventory Control Society, now the Association for Operations Management. This non-profit association studies operations management, which includes factors such as product planning, information systems management, resource allocation, and much more. APICS also provides manufacturing certifications and other resources for companies involved in industrial production processes.
Manufacturing resource planning aims to address both operational planning in units, and financial planning in dollars. This means that an MRP II plan would cover how much the company produces and how it uses capital. Supply chain management is an important part of MRP II, but so is efficient use of software and IT resources.
Experts are quick to point out that manufacturing resource planning is not just a technical tool, but a combination of software and human decision-making. In other words, a good MRP II needs “people skills” applied to software tools to be productive. This kind of thinking is central to many new planning technologies that companies are using to map out their future.
The elements of a manufacturing resource plan include a master production schedule, which brings together all relevant factors of production, as well as elements such as shop floor control or capacity planning. In financial terms, manufacturing resource planning can include general ledger, accounts receivable and accounts payable, cost reporting, purchasing management, and more. Other finer items such as batch tracking, tool management and shop floor data collection can also be considered an MRP II system for a company.
As relational database technology improved and the cost of digital planning tools continued to decline, companies started using MRP and MRP II options. These have now given way to an even broader option for management: ERP or Enterprise Resource Planning. ERP has eliminated the use of MRP II in some companies, but the basic idea is the same; companies use complex digital tools to help in almost every part of the decision-making process that affects a company’s production, finances and logistics.
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