Getting it Just-in-Time with MRP & MRP II

As the backbone of any manufacturing company, process influences all elements of a value stream. It is then imperative that such processes run efficiently to mitigate waste and increase overall profit in the long run. That type of pressure can cause any operations manager a world of stress. Luckily, several systems exist to ease this daunting task; MRP and MRP II offer such convenience.

An Overview of MRP-based Planning

It’s important to note the difference between MRP and MRP II before pressing forward. In short, MRP (Material Requirements Planning) assists manufacturing companies in managing material procurement to support efficient manufacturing operations. MRP II (Manufacturing Resource Planning) incorporates the value stream from manufacturing to shipping to optimize a company's ability to produce and package goods and send them to the customer.

Each method offers manufacturing facilities a great opportunity: to maximize their production capacity while minimizing lost revenue due to wasted energy. Let’s take a look at how these two systems work together.

An Ideal Model for Production

Working together, MRP and MRP II cover all the bases of a company’s production value stream. MRP enables a company to translate a master production schedule into the raw material and component-level demand. Through this translation, companies break down top-level production into the individual stages of raw material purchase and assembly based on component lead time. Such luxury increases control over product development.

From here, MRP II takes this accrued knowledge and incorporates the data through the entire value stream. That includes production planning, machine capacity scheduling, demand forecasting, analysis models, and quality tracking. Various other capabilities include tools for tracking employee attendance, labor construction, and productivity.

A Couple of Caveats

When properly implemented, these methods maximize throughput and minimize lead time, resulting in an optimized production schedule. However, improper training can lead to miscommunication across the value stream. For example, a business manager without a sufficient grasp on IT may, in turn, set the system up incorrectly. Conversely, an IT manager without an understanding of MRP and MRP II methods might not work to improve the process flow. Therefore, an implementation must include education for both parties to maximize overall communication.

As outlined above, even with precise planning with MRP and MRP II, problems may still arise. Mainly a result of human error and misunderstanding, such errors are now prevented or repaired with automated scheduling.