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October 8, 2019 / By Jared Cohen

What is Manufacturing Resource Planning?

Manufacturing Resource Planning or MRP II is the advanced form of Materials Requirement Planning or MRP, an integrated information system that helps businesses in making the right decisions regarding scheduling jobs, design engineering, and managing the inventory. MRP II works by including additional data that is not incorporated in MRP, such as employee reimbursements and financial needs of the company. This helps to achieve better cost control in the manufacturing process for the businesses.

Both MRP II and MRP are predecessors of the Enterprise Resource Planning system or ERP, which helps a business to manage and monitor important operations of the company. The ERP system can help in planning the inventory, purchases, and sales, as well as monitoring the marketing, finance, and HR responsibilities. ERP is the most commonly used information system today, but many of the benefits of  MRP II have given the impression that it is more lucrative for businesses.

The Perks of MRP II

The computer-based information system can allow a business to create more detailed production schedules by integrating real-time data on the availability of materials and workforce, which in turn helps to better streamline the manufacturing process. While MRP focused on improving productivity for the company, MRP II takes it a step further by using a sales forecast based module. This helps businesses to aptly plan the required raw material quantities and labor as well as calculate the processing time to fulfill the estimated sales requirement. 

Manufacturing Resource Planning has all the features to effectively replace MRP. It not only delivers all the functionalities of an MRP system but also integrates better tools for planning production, forecasting demands, estimating sales, tracking inventory, managing bill of materials, and general accounting as well as scheduling logistics. In other words, MRP II offers a more realistic solution to what a company can deliver in a certain defined period. 

Some of the MRP II software versions also feature simulation options that allow a business to enter their desired variables and analyze how effective the outcomes would be. This helps to further provide quality assurance and managing any unforeseen demands. It is for this reason that MRP II is sometimes termed as a more extensive version of ERP as well. 

What’s more, MRP II can be used as a standalone system or alongside the ERP system as required. With that in mind, the latter option would be more beneficial to those businesses that do not involve any kind of manufacturing operations. An ERP system can help in customer relationship management, managing human resources, and asset management in such cases.

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