Manufacturing Resource Planning

Manufacturing Resource Planning (MRP II)

Manufacturing Resource Planning (MRP II) is an integrated, computer-based information system that helps manufacturers determine and allocate the resources needed for efficient production. It centralizes data and coordinates scheduling, inventory, capacity, and cost control to support operational decision-making.

Key takeaways

• MRP II extends materials requirement planning (MRP) by adding capacity planning, labor and machine scheduling, and cost management.
• It produces detailed production schedules that align material deliveries with machine and labor availability.
• MRP II systems can operate standalone or as a module within a broader enterprise resource planning (ERP) suite.
• Many MRP II solutions include simulation and “closed-loop” feedback to test changes and assess downstream effects.

How MRP II works

MRP II uses real-time data (sales forecasts, bills of materials, inventory levels, machine and labor availability, and cost data) to:
* Generate master production schedules
* Plan material purchases and deliveries
* Schedule capacity for machines and personnel
* Track inventory and production status
* Support cost accounting and performance analysis

Operators and planners feed the system with inputs and use the system’s outputs to coordinate procurement, production, and workforce activities.

Historical context

MRP (materials requirement planning) was an early software system focused on scheduling raw material deliveries and quantities based on sales forecasts and basic assumptions about capacity. By the 1980s, manufacturers needed systems that integrated inventory forecasting with accounting, capacity, and cost control. MRP II evolved to meet those needs and laid the groundwork for modern ERP systems.

MRP II vs. MRP vs. ERP

MRP
* Core functions: master production scheduling, product structure (BOM), and inventory status.
* Focused mainly on material requirements.

MRP II
* Includes MRP functions plus machine capacity planning, demand forecasting/management, input/output control (quality assurance), and general accounting.
* Provides a more realistic, holistic view of manufacturing capabilities.

ERP
* Broader in scope than MRP II, covering non-manufacturing domains such as human resources, customer relationship management, and enterprise-wide finance.
* Often includes MRP II as a component within a larger integrated suite.

Common features of MRP II systems

• Master production scheduling
• Bill of materials management
• Inventory tracking and replenishment
• Capacity planning for machines and labor
• Demand forecasting and what-if simulation
• Input/output control and quality assurance
• Integration with accounting and cost tracking

Benefits

• Improved coordination of materials, machines, and workforce
• Reduced lead times and inventory carrying costs
• More accurate production scheduling and capacity utilization
• Enhanced ability to simulate scenarios and respond to changes
• Better alignment between production planning and financials

Examples of MRP II software

Examples of vendors that offer MRP II or manufacturing modules include:
* Fishbowl
* Factory Edge
* Prodsmart
* abas (Forterro)
* Oracle NetSuite
* Epicor
* VAI S2K Enterprise

Frequently asked questions

Q: Is MRP II software-based?
A: Yes. MRP II is implemented through software; personnel gather and enter data and review the system’s outputs.

Q: Has MRP II replaced MRP?
A: MRP II has largely superseded the original MRP systems because it includes all MRP functionality plus capacity and cost features.

Q: How does MRP II relate to ERP?
A: ERP systems are broader enterprise suites that often include MRP II functionality among other modules (HR, CRM, finance, etc.).

Conclusion

MRP II modernized manufacturing planning by extending material-focused planning to include capacity, workforce, costing, and simulation capabilities. It remains an important tool for manufacturers and commonly exists either as a standalone solution or as a core component within ERP systems.