TERM PAPER ON

MRP II (MANUFACTURING
RESOURCE PLANNING)

Presented
To
Dr.Neetha J. Eappen

On
March 13th, 2015

Submitted By:
Tomin Baby
P14215

Abstract
This paper talks about Manufacturing Resource Planning and various
aspect related to it. From this we can clearly understand what actually
Manufacturing Resource Planning means and how to relate to a
manufacturing company. Here we are able to evaluate the reason for the
success or failure of manufacturing resource planning implementation
project. It mainly highlights the importance and full potential of MRP II.
One of the article is about the Management guide to Manufacturing
Resource Planning i.e., it all about proper guideline regarding
implementing Manufacturing Resource Planning in any organization. Only
by following proper guidelines we can ensure the success of
implementation

Introduction
Manufacturing resource planning (MRP II) is a method of planning
each and every resource in an organization particularly in manufacturing
company. It is an incorporated method of operational planning in units,
financial planning for the organization. It serves as an extension to MRP
(Material Requirement Planning). Its not fundamentally software, for
managing it we require peoples skills, then a commitment to database
reliability and accuracy. Its all about total organization concept for using
human resource and company resources more efficiently and effectively.
Material requirements planning (MRP) and manufacturing resource
planning (MRPII) are predecessors of enterprise resource planning (ERP), a
business information integration system.

Benefits MRP II systems can provide:

Effective control of stock , Better scheduling , Productive associations with
suppliers for design or manufacturing: , Improved design control , Proper
quality and quality control for financial and costing: , Concentrated
working capital for stock , Improved cash flow through faster deliveries ,
Precise stock records.

MRP versus MRP II

MRP is manufacturing-centric: It aims at the scheduling and

materials control aspects of construction to orders placed by
customers. This confines its capability to foot production on demand
forecasts.

This differentiates it from MRP II, which tracks supplementary

aspects of production, such as personnel requests, financial
calculations, demand forecasts and business planning.

MRP II is essentially more integrative and deliberately oriented than

MRP, taking into consideration that it goes beyond the short term to
weigh up the medium-term and long-term impacts of all production
resources in the organization.

MRPII goes several steps ahead of MRP. While MRP stopped up at the
receiving dock, MRPII incorporates the value flow all the way
through the manufacturing facility to the shipping dock where the
product is packaged and deliver it to the final customer

MRP II systems have been implemented in most manufacturing industries.

Some industries need specialised functions e.g. lot traceability in
regulated manufacturing such as pharmaceuticals or food. Other
industries can afford to disregard facilities required by others e.g. the
tableware industry has few starting materials mainly clay and does not
need complex materials planning. Capacity planning is the key to success
in this as in many industries, and it is in those that MRP II is less
appropriate.MRP II is not a proprietary software system and can thus take
many forms. It is almost impossible to visualize an MRP II system that
does not use a computer, but an MRP II system can be based on either
purchasedlicensed or in-house software. Almost every MRP II system is
modular in construction. Characteristic basic modules in an MRP II system
are: Master production schedule (MPS), Bills of Materials, Capacity
Planning, Material Requirement Planning, aggregate planning, forecasting,
business planning, cost management etc

The MRP II Hierarchy

Review of Articles

A Management Guide to MRP II: Manufacturing

Resource Planning

Manufacturing Resource Planning is a valuable management system to

have around. Correctly implemented and maintained, this sophisticated
offspring of MRP( Material Requirement Planning) can ensure that various
departments of manufacturing company- including inventory, marketing,
engineering, production, accounting are working from a coordinated
information
base
to
meet
company-wide
objectives.
Proper
implementation is all about proper managementskill. Unfortunately, many
of todays senior managers have not direct exposure to data processing
environment.
The following management guidelines should aid top

management in avoiding the pitfalls other executives have already

experienced and this will ensure the efficient and effective
implementation of Manufacturing Resource Planning.

1) First and Foremost, the company has to be totally committed

to the program.
Implementation of a Manufacturing Resource Planning is very difficult to
manage project. It requires higher level of management attitude and
committed to implement that. People involved in it should have a proper
idea about what it is. Management from the top level to bottom level must
be prepared to take and show some interest in the program.
2) The implementation organization has to be clearly defined
In addition to clear statement of management support, its important that
the members of the project implementation team and their objectives are
clearly identified to other within the company. It is also important that the
MRP 2project managers are given direct access to the top management.
Instead of implementing in the organization as full, first begin with the
base level then moves into all departments.
3) Allow ample time and resource for personnel training and
education.
Training and education have to be a continued part of any MRP2 approach.
Education assistance cant be limited to one or two person. Many study
courses are available to the managers to understand about it more clearly.
Proper in-house training should be providedby expert in the market. Better
training and education to the employees helps to perform the work as
early as possible.
4) Watch out for company political barriers
Unfortunately, the larger the company, the more likelihood of internal
political barriers. MRP II may be the first experience that the people have
in their life and there will be lot of worries. There may issues inside and
outside the organization. Sometimes there may have better relationships
with each other.
5) Keep internal communication lines open
Poor interdepartmental communication is a close relative of political
barriers, more likely to occur in large, structured organizations. Holding

informal meeting involving top management, to get additional input and

to reinforce the idea that the entire company is backing the plan.
6) Key to success is planning
It is vital to adopt and follow a carefully thought out implementation plan,
complete with achievable milestones, statement of expected results and
clearly assigned responsibilities. The plan should be step by step process,
with each step proven successfully before moving on. Earlysuccesses
build confidence.
7) MRP II requires meticulously kept data and records
For the system to be usable and show benefits in the early stages, every
effort must be made to clean up your data as soon as possible. Establish
data accuracy measurement criteria and objectives. Then compare results
with objectives.
8) Make sure you can get all the management information you
need from the system
This key concern has to be addressed before you embark on an MRP II
project. When we are selecting an MRP II system it should not be rigid and
it should be easily customized.
All the above are the some of the basic guideline for effective
implementation of MRP II. By following each guideline we are able to make
effective management of Manufacturing Resource Planning system in the
organization.

Success and Failure of MRP II Implementation

MRP II is a companywide, closed-loop manufacturing control system which
integrates all aspects of manufacturing- materials control, shop floor
control, requirement planning, finance, marketing and personnel. MRP II is
designed to help managerscontrol complex manufacturing and business
environments. For companies able to exercise effective system
management, substantial benefits of integration are claimed by software
suppliers, in term of improved control of production, productivity, and
competitive performance.

Factors Contributing to Success

In this case its mentioned that success of Manufacturing Resource

Planning should be related to the objectives set for implementation.
However this relies on the same set of objective being adhered to
throughout the course of the implementation. In some situation
companys personal modified and redefined objectives as the
implementation progressed. It could be argued that there is a need for
some form of independent review of success in MRP II type
implementations. Whatever the procedure used it must be detailed and
thorough. However, a number of factors make it difficult to establish a
truly objective criterion for MRP II success. In some organization there is
better organizational environment to work as well as to perform, here
were able to implement Manufacturing Resource Planning system very
easily into the organization. Success of implementation mainly depends
on the skills and efficiency of the managers who control and organize such
thing in an organization. Time factor is also a vital importance in this, we
should try to complete it as early as possible as having more delay there
requires huge investment and along with that it may decrease the
efficiency of the organization. Proper assembling and managing of
material in the organization helps in proper implementation of
Manufacturing Resource Planning in the organization

Factors Contributing to Failure

Here we are going to see certain factors which slow down or stops MRP II
implementation. These include factors emanating from the firms external
environment, such as a decline in product markets and failure on the part
of a software company. Most factors were internal and related to software
changes, changes in key personnel, lack of top management support, lack
of discipline, changes in deep-rooted practices, the exploration of
alternative systems, resistance, the lack of a broad base of support for the
change and political factors centred on ownership of the system. One
source of external difficulty has to do with a decline in the firms product
market during the implementation. Contextual factors played a significant
role in attributions which referred to top management support. They
focused on the impact which different management style, cultures and
structures favoured by senior managers could have on Manufacturing
Resource Planning implementation. There are several instances where
there occurs failure of MRP II implementation due to lack of management
support. Lack of discipline was blamed for many of the internal problems
associated with implementation. Where disciplines were not being
maintained people would quickly lose confidence in the accuracy of the
system and could destroy the implementation.

Conclusion

MRPII systems begin with MRP, material requirements planning. MRP allows for the input of
sales forecasts from sales and marketing. These forecasts determine the raw materials
demand.MRPII facilitates the development of a detailed production schedule that accounts for
machine and labour capacity, scheduling the production runs according to the arrival of materials.
An MRPII output is a final labour and machine schedule. Data about the cost of production,
including machine time, labour time and materials used, as well as final production numbers, is
provided from the MRPII system to accounting and finance. It involves proper planning of all the
resources in an organization. That will ultimately increase the overall productivity of the
organization. From the above information, we are able to understand, whats this management
guide is all about and it impact the MRP II. We are also able understand, what are the factors
that influencing the success and failure of implementing MRP II.

Bibliography
Huther, W. H. (1983). A management guide to Manufacturing Resource Planning.
Management Review , 42-50.
Wilson, F., & Desmond, J. (1994). Success and Failureof MRP II Implementation.
British Journal Of Management , 221-240.