Baghdad UniversityAl-Khwarizmi College of Engineering

Automated Manufacturing Department

Objective of MRP and MRP2 in computer study

by haider k. mohammed

date 18-1-2015

Contents:- 1. Introduction of MRP and MRPII

1.1 what is MRP? And what is an objective of MRP?

1.2 Problems with MRP systems

1.3 What is MRPII ?

1.4 Manufacturing Resource Planning ( MRP2) flow chart

1.5 MRP and MRPII: General concepts

2. Application software of MRP & MRPII

3. ADVANTAGES OF MRP

4. BENEFITS OF MANUFACTURING RESOURCE PLANNING (MRP2)

1.1 what is MRP? And what is an objective of MRP? Material requirements planning (MRP) is a production

planning, scheduling, and inventory control system used to manage manufacturing processes. Most MRP systems are software-based, while it is possible to conduct MRP by hand as well.

An MRP system is intended to simultaneously meet three objectives:

1- Ensure materials are available for production and products are available for delivery to customers.

2- Maintain the lowest possible material and product levels in store

3- Plan manufacturing activities, delivery schedules and purchasing activities.

1.2 Problems with MRP systems

First problem with MRP systems - the integrity of the data. If there are any errors in the inventory data, the bill of materials (commonly referred to as 'BOM') data, or the master production schedule, then the output data will also be incorrect. Data integrity is also affected by inaccurate cycle count adjustments, mistakes in receiving input and shipping output, scrap not reported, waste, damage, box count errors, supplier container count errors, production reporting errors, and system issues. Many of these type of errors can be minimized by implementing pull systems and using bar code scanning. Most vendors in this type of system recommend at least 99% data integrity for the system to give useful results.

Second problem - systems is the requirement that the user specify how long it will take for a factory to make a product from its component parts (assuming they are all available). Additionally, the system design also assumes that this "lead time" in manufacturing will be the same each time the item is made, without regard to quantity being made, or other items being made simultaneously in the factory.

The other major drawback of MRP is that takes no account of capacity in its calculations. This means it will give results that are impossible to implement due to manpower or machine or supplier capacity constraints. However this is largely dealt with by MRP II.

1.3 What is MRPII ? Manufacturing resource planning (MRP II) is

defined as a method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning, and has a simulation capability to answer "what-if" questions and extension of closed-loop MRP.This is not exclusively a software function, but the management of people skills, requiring a dedication to database accuracy, and sufficient computer resources. It is a total company management concept for using human and company resources more productively.

1.4 Manufacturing Resource Planning ( MRP2) flow chart

Manufacturing Resource Planning (or MRP2) - Around 1980, over-frequent changes in sales forecasts, entailing continual readjustments in production, as well as the unsuitability of the parameters fixed by the system, led MRP (Material Requirement Planning) to evolve into a new concept.

1.5 MRP and MRPII General concepts

Material requirements planning (MRP) and manufacturing resource planning (MRPII) are both incremental information integration business process strategies that are implemented using hardware and modular software applications linked to a central database that stores and delivers business data and information.

MRP is concerned primarily with manufacturing materials while MRPII is concerned with the coordination of the entire manufacturing production, including materials, finance, and human relations. The goal of MRPII is to provide consistent data to all players in the manufacturing process as the product moves through the production line.

Paper-based information systems and non-integrated computer systems that provide paper or disk outputs result in many information errors, including missing data, redundant data, numerical errors that result from being incorrectly keyed into the system, incorrect calculations based on numerical errors, and bad decisions based on incorrect or old data. In addition, some data is unreliable in non-integrated systems because the same data is categorized differently in the individual databases used by different functional areas.

MRPII systems begin with MRP, material requirements planning. MRP allows for the input of sales forecasts from sales and marketing. These forecasts determine the raw materials demand. MRP and MRPII systems draw on a master production schedule, the breakdown of specific plans for each product on a line. While MRP allows for the coordination of raw materials purchasing, MRPII facilitates the development of a detailed production schedule that accounts for machine and labor capacity, scheduling the production runs according to the arrival of materials. An MRPII output is a final labor and machine schedule. Data about the cost of production, including machine time, labor time and materials used, as well as final production numbers, is provided from the MRPII system to accounting and finance.

2. Application software of MRP & MRPII

After moving towards these software’s it helps to:

1- Avoids costly human errors

If the company manually tracks the entire inventory and forecast it then the risk of error in this method is high. Imagine if the company have order of only 100 customers with each order have 10 different inventories the risk error is too high and if the wrong inventory is dispatched to the customer then it will obviously impact on customer satisfaction, increase cost of company and order fulfillment performance.

2- Intelligent management of real time business

Moving towards powerful software means the operation staff can forecast and manage inventory or even they can manage whole supply chain at one place. If the demand increases software make it easy to manage time scales and make it easy to adjust any kind of procurement, production and distribution process.

3- Avoid unnecessary overstocking

Software makes it easy to manage inventory with minimum lead time, it is difficult to manually recheck all inventories and forecast how much amount of material is required and how much is already in the stock, But with the help of software it become very much easy to maintain record of every inventory which helps to avoid unnecessary overstocking.

2. Application software of MRP & MRPII

4- Manage logistics

Integrated Software helps to monitor inventory at one place either it is coming from supplier or it is to deliver to customer or shifting to warehouse. So it helps to controlling planned and actual stock transfers from supplier or transfer to customers or warehouse.

5- Reduce paperwork.

Moving from paper work to software ensure you that all transactions are entered in one system, coded up correctly and will give complete record whenever require. So it minimizes paperwork, time and cost.

2.1 What is pc/MRP? pc/MRP is a fully integrated Material Requirements Planning (MRP), Accounting, and

Inventory program. pc/MRP comes complete with ten integrated modules: Address Book, Inventory, Purchasing, Receiving, Sales, Invoicing, Bills of Materials, Stock Room, Shipment, and Accounting (GL, AP, AR). All of the modules can be accessed through the pc/MRP Main Menu shown to the left. Modules can be used on a stand alone or integrated basis.

pc/MRP can be configured to support manufacturing, distribution or retail operations. pc/MRP's multi-user version allows multiple people to enter purchase orders, invoices etc. at the same time on PCs networked with any of the multi-user network servers such as Windows, and Novell.

pc/MRP for Windows was compiled in Visual FoxPro for Windows. Since FoxPro uses dBASEIII+ dbf files, pc/MRP's data base files, are compatible with dBase, FOX , Access, Excel etc. Version 8.10 and above uses the Miscrosoft Visual FoxPro database and Microsoft only supports this database through an ODBC interface.

pc/MRP's Single-user Business and two Multi-user versions are priced at $730.00, $1870.00, and $2495.00 respectively. Users can upgrade from the single-user version to the multi-user version by contacting Software Arts. Inc. and paying the current price difference between the Multi-user version and the price paid for the non-multi-user version (no data will be lost).

3. ADVANTAGES OF MRP:

Helps to minimize inventory level. Increase inventory turnover. Track material requirements. Identifies shortage in inventory items. Helps to track raw material, work-in-process and finish

goods. Helps to plan the procurement schedule. Determines the most economical lot sizes for order. Computes quantities required for safety stock. Calculate bill of material (BOM) and assemblies required. On time delivery. Customer service and responsiveness

4. BENEFITS OF MANUFACTURING RESOURCE PLANNING (MRP2):

Better control of Inventories

Productive relationship with

Better quality and also control quality

Improve design control

Improve cash flow through fast delivery

Accurate inventory records

Reduced working capital for inventories