Manufacturing Resource Planning (MRP II)
This is a development that seeks to address some of the shortcomings
of MRP. It includes all of the elements of MRP, it: is based
around the Bill of Materials,
- uses a Master Production Schedule (MPS) as its starting point
and
- uses the three steps of Explosion, Netting and Offsetting
to create the initial schedule.
However MRP II includes the following four major developments
from MRP:
1. Feedback
MRP II includes feedback from the shop floor on how the work
has progressed, to all levels of the schedule so that the next
run can be updated on a regular basis. For this reason it is
sometimes called 'Closed Loop MRP'.
2. Resource Scheduling
There is a scheduling capability within the heart of the system
that concentrates on the resources, i.e. the plant and equipment
required to convert the raw materials into finished goods. For
this reason the initials `MRP' now mean Manufacturing Resources
Planning. The advantages of this development are that detailed
plans can be put to the shop floor and can be reported on by
operation, which offers much tighter control over the plant.
Moreover loading by resource means that capacity is taken into
account. The difficulty is that capacity is only considered after
the MRP schedule has been prepared. It may turn out that insufficient
time was allowed within the MRP schedule for the individual operations
to be completed.
3. Batching
Rules Batching rules can be incorporated, indeed they have
to be if resource scheduling is to take place. Most software
packages offer a variety of batching rules. Three of the more
important are 'Lot for Lot', 'EBQ' and 'Part Period Cover'.
- 'Lot for Lot' means batches that match the orders.
Therefore if a company is planning to make 10 of Product A followed
by 20 of Product B, then the batches throughout the process will
match this requirement. If both A and B require two of a certain
sub assembly then that will be made in quantities of 20 of A
and 40 of B. It is the batching implicitly followed in basic
MRP.
- 'EBQ' stands for Economic Batch Quantity . The batch
size is calculated by a formula that minimises the cost through
balancing the set up cost against the cost of stock.
- 'Part Period Cover' means making batches whose size
cover a fixed period of demand. A policy of making a weeks requirement
in one batch is an example.
4. Software extension programmes
A number of other software programmes are included in the
MRP II suite. Some of these are further designed to help the
scheduling procedure. The most important is Rough Cut Capacity
Planning (RCCP), an initial attempt to match the order load to
the capacity available, by calculating (using a number of simplifying
assumptions) the load per resource. Overloads are identified
and orders can be moved to achieve a balance. This has been described
as "knocking the mountains (the overloads) into the valleys
(periods of underload)".
Other additions are designed to extend the application of
the MRP II package. For example it may include an option for
entering and invoicing sales orders (Sales Order Processing).
Another common extension is into stock recording and a third
into cost accounting. A full MRP II implementation can therefore
act as an integrated database for the company.
Data accuracy
This last development means that the company must put great
emphasis on data accuracy. Errors in recording in one part of
the system will result in problems for all the users. The suppliers
of such systems encourage users to aim for accuracy of between
95% and 98%.
Reference
- Wright. O., Manufacturing Resource Planning - Unlocking America's
Productivity Potential, Oliver Wright Ltd. Publication Inc, 1981,
Essex Jn., VT.
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