MRP II with ERP

In the 1970s material requirement planning (MRP) was developed as a mechanism for manufacturing companies to calculate more precisely what materials they required, at what time and in optimum quantities.

MRP (and MRPII ) evolved from the earliest commercial database management package developed by Gene Thomas at IBM in the 1960s.

Manufacturing resource planning (MRP II) is defined by APICS 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.

Manufacturing Resource Planning (MRPII) evolved from MRP, because many companies realised that as well as the need to calculate their material requirements precisely, they also required detailed capacity planning, scheduling, shop floor control and other calculations.
MRPII introduced the closed-loop model, which uses a centrally held data file to record, monitor and report on various company activities. By comparing forecasts with actual data, companies can analyse performance and improve processes to achieve better efficiency.
Caliach MRP is Caliach's established MRPII system for managing core manufacturing activities
Enterprise resource planning (ERP) developed MRPII even further to embrace all business functions, not just those concerned with actual manufacturing. ERP encompasses materials planning, efficient production, profitability, customer satisfaction - almost every aspect of business.
ERP also incorporates the principles of global supply chain management, in which the value of every activity in the supply chain is analysed, along with the growing development of Internet or web-enabled procurement.

Manufacturing Resource Planning (MRP II) system provides a way to create a seamless interface between engineering and manufacturing. In brief, MRP II controls inventory ordering and distribution through a simple set of questions:

• What are we going to make?

• What does it take to make it?

• What have we got?

• What do we have to get?

An integrated information system used by businesses. Manufacturing Resource Planning (MRP II) evolved from early Materials Requirement Planning (MRP) systems by including the integration of additional data, such as employee and financial needs. The system is designed to centralize, integrate and process information for effective decision making in scheduling, design engineering, inventory management and cost control in manufacturing.

Building Blocks of MRP II
Basic Modules	Ancillary Modules	Related Modules
1. Master Production Scheduling (MPS) 2. Item Master Data (Technical Data) 3. Bill of Materials (BOM) (Technical Data) 4. Production Resources Data (Manufacturing Technical Data) 5. Inventories & Orders (Inventory Control) 6. Purchasing Management 7. Material Requirements Planning (MRP) 8. Shop Floor Control (SFC) 9. Capacity Requirements Planning (CRP) 10. Standard Costing (Cost Control) 11. Cost Reporting / Management (Cost Control) 12.  Distribution Resource Planning (DRP)	1.  Business Planning 2.  Lot Traceability 3.  Contract Management 4.   Tool Management 5.  Engineering Change Control 6.  Configuration Management 7.  Shop Floor Data Collection 8.  Sales Analysis and Forecasting 9.   Finite Capacity Scheduling (FCS)	1.  General Ledger 2.  Accounts Payable (Purchase Ledger) 3.   Accounts Receivable (Sales Ledger) 4.  Sales Order Management 5.  Distribution Requirements Planning (DRP) 6.   [Automated] Warehouse Management 7. Project Management 8.  Technical Records 9.   Estimating 10.  CAD/CAM 11.  CAPP

MASTER PRODUCTION SCHEDULE.
The master production schedule (MPS) is basically the production schedule for finished goods. This schedule is usually derived from current orders, plus any forecast requirements. The MPS is divided into units of time called "buckets." While any time frame may be utilized, usually days or weeks is appropriate. 
BILL-OF-MATERIALS.
The bill-of-materials is a file made up of bills-of-material (BOM). Each BOM is a hierarchical listing of the type and number of parts needed to produce one unit of finished goods. Other information, such as the routings (the route through the system that individual parts take on the way to becoming a finished good), alternate routings, or substitute materials may be also be contained with the BOM.
The bill-of-material can be used to determine the gross number of component parts needed to manufacturer a given number of finished goods. Since a gross number is determined, safety stock can be reduced because component parts may be shared by any number of finished goods (this is known as commonality).

Benefits
MRP II systems can provide:

§  Better control of inventories

§  Improved scheduling

§  Productive relationships with suppliers

For design / engineering:

§  Improved design control

§  Better quality and quality control

For financial and costing:

§  Reduced working capital for inventory

§  Improved cash flow through quicker deliveries

§  Accurate inventory records