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MRP II is an advanced version of MRP, which analyzes the entire production environment, including financial effects, labor efficiency, and scheduling. MRP II involves accurate data collection and planning stages, but unexpected changes can slow down the production process. It is often run in a batch environment to make rapid course corrections.
Manufacturing Resource Planning (MRP II) is a systematic method of modeling the various forces that go into the production of a product and is a direct successor of Materials Requirement Planning (MRP), which mainly dealt with manufacturing and inventory control processes in a production environment. While both systems are designed as of 2011 using enterprise software, they were initially built to be flowchart systems that could be drawn by hand and implemented without the aid of computers. Where MRP II has advantages over MRP is in its comprehensive analysis of the entire production environment. It includes new elements in data calculations, such as the financial effects on the production cycle and the effects of changes in labor efficiency and scheduling on production levels. These factors can influence other aspects of production, from forecasting future orders to performance measurements for wage rates and sales data.
The main difference between MRP and MRP II is one of scale. MRP was initially developed in the 1960s by Joseph Orlicky after studying the manufacturing processes used by the Toyota company in Japan. Manufacturing was known to operate at its maximum capacity when materials for products were available in exactly the quantities needed for orders, which is commonly referred to as Just in Time (JIT) inventory, and when those orders could be scheduled and delivered without delay . These are the main concerns that the MRP has focused on.
By 1981, Orlicky’s ideas for MRP had been adopted by more than 8,000 companies worldwide, and by the late 1980s, the software had evolved to use the more complex version of MRP II, pioneered by Oliver Wright and George Plossi. The benefits of MRP II are based on the understanding that previously considered peripheral influences can have a huge impact on the efficiency of a manufacturing environment. These include aspects such as design engineering for products and cost control throughout the system. MRP II takes the Just in Time concept beyond simple inventory and extends it to a Just in Time calculation of manpower availability and capacity, coordination for raw material arrival, and so on.
For MRP II to function properly, the data it collects must be consistently accurate. This is essential because each stage of a manufacturing process using MRP II involves some sort of planning based on this data. The process generally goes through seven different stages incrementally, with a few feedback loops along the way to correct errors. First, there is master business planning followed by production planning and master production scheduling. Before production begins, a material requirements planning, or MRP, phase is then undertaken and capacity planning for the plant is calculated. At this point, every calculation is assumed to be accurate and the last two steps of executing capacity plans and material plans take place.
The disadvantages of MRP II center around the fact that all planning before production can be based on misleading data and slow down the production process itself. When unexpected changes occur, the planning process also has to be recalculated from the beginning, which can lead to inefficiency if feedback on problems is not provided in a timely and regular manner. For this reason, MRP II is often run in a batch environment, where a manufacturing facility periodically produces product runs in single batches so that rapid course corrections can be made to meet real-world conditions in terms of financing, sales and operations.
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