What Are MRP Systems?

by Bob Turek; Updated September 26, 2017
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MRP systems are software systems for manufacturing and distribution companies. MRP can stand for material requirements planning (little MRP) or manufacturing resource planning (big MRP). Big MRP is also referred to as MRP II. Little MRP is a module within big MRP and plans assembly, fabrication and materials. Big MRP also includes purchasing, order entry, inventory, shop floor control and capacity planning software modules.

Little MRP

MRP plans demand and supply at each level of manufacturing and purchasing. Bill of materials support the planning process by providing the information about how parts and assemblies are put together. Additional information related to the average length of time to process or buy a part, average quantities to buy or make with each purchase order or work order and designations as to whether the part numbers are purchased parts or manufactured parts contribute to the planning process.

Big MRP

Big MRP includes software modules for little MRP, bill of materials, purchasing, order entry, inventory, shop floor control, capacity planning, costing and accounting. Big MRP can also include a master scheduling module that controls how outside demand from customer orders and forecasting are planned at the finished goods level. Master scheduling is typically a program that produces plans at the finished goods level. Once the master schedule is completed, then little MRP can produce plans below the finished goods level, using the master schedule plans as input. This decoupling of the two planning programs allows testing for manufacturing capacity at the master schedule level.

Implementation

Big MRP is usually implemented in phases starting with inventory, purchasing and accounting closely followed by little MRP, order entry and master scheduling. Shop floor control is a more difficult module to implement, because it requires information about how parts and assemblies are built by individual work centers, with labor and machine hours. Capacity planning also uses the schedules that shop floor control generates to obtain a picture of the hours available in a work center and the hours loaded into the work center by the shop floor schedule.

Training

Big MRP implementation causes tremendous changes in business processes. Generic training about the impact of such a system on a company may be necessary, especially if the company has no experience with MRP implementation. Software training of the project team is required to support a testing or conference room pilot effort where the project team decides how the software will be used to run the business.

About the Author

Bob Turek started writing in 1994 for "The Performance Advantage" magazine. His book "Value Selling Business Solutions" draws on technology industry experiences gained from his position as director of business development for Infogain's cloud CRM for customer support operations practice. He holds a bachelor's degree in economics and psychology from Claremont McKenna College and a Master of Business Administration from the University of Southern California.

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