MANUFACTURING RESOURCE PLANNING - MRP

MANUFACTURING RESOURCE PLANNING 

A method for the effective planning of all resources of a manufac-turing  company.  Ideally,  it  addresses  perational  planning  in units, financial planning in dollars, and has a simulation capabil-ity to answer “what-if” questions. It is made up of a variety of functions, each linked together: business planning, sales and op-erations planning, production planning, master scheduling, mate-rial requirements planning, capacity requirements planning, and the execution support systems for capacity and material. Output from these systems is integrated with financial reports such as the business plan, purchase commitment report, shipping budget, and inventory projections in dollars. Manufacturing resource plan-ning is a direct outgrowth and extension of closed-loop MRP.

The next step in this evolution is called Manufacturing Resource Planning or MRP II (to distinguish it from Material Requirements Planning, MRP). A direct outgrowth and extension of closed-loop MRP, it involves three additional elements: 

1. Sales & Operations Planning—a powerful process to balance demand and supply at the volume level, thereby providing top management with far greater control over operational aspects of the business.

2. Financial  interface—the  ability  to  translate  the  operating plan (in pieces, pounds, gallons, or other units) into financial terms (dollars). 

3. Simulation—the ability to ask “what-if” questions and to ob-tain actionable answers—in both units and dollars. 

This was done only on an aggregate, “rough-cut” basis, but to-day’s advanced planning systems (APS) enable effective simu-lation at very detailed levels.

Now it’s time to define Manufacturing Resource Planning. This definition, and the one to follow, come from APICS—The Educa-tional Society for Resource Management. APICS is the leading pro-fessional society in this field, and its dictionary has set the standard for terminology over the years.