Material requirements planning (MRP) is a production planning and inventory control system used to manage manufacturing processes. MRP uses a computer to help manage materials and inventories by creating material plans and production schedules based on supply chain lead times. MRP systems require accurate data including a master production schedule, bill of materials, lead times, and inventory balances to function effectively and produce useful outputs for meeting production needs.

1. Prepared By : Mehta Shashwat J.
(08/IT/091)

2.  Material requirements planning (MRP) is a
production planning and inventory control
system used to manage manufacturing
processes. Most MRP systems are software-
based, while it is possible to conduct MRP by
hand as well.
 It is an operations management tool that uses a
computer to help manage materials and
inventories.
 MRP is a concept of creating material plans and
production schedules based on the lead times of
a supply chain. However, even if you create an
MRP-based plan based on an ideal factory model,
problems may still actually occur.

3.  MRP is a tool deal with these problem
◦ What items are required?
◦ How many are required?
◦ When are they required?

4.  A forecast of what products need to be made in
the next few months (also known as a Master
Production Schedule).
 A recipe which tells you which materials are used,
in what quantities, to build each product (also
known as a bill of material).
 The time required to obtain or manufacture all
products and materials (the lead times).
 The maximum amount that can be processed at
any one time (the batch size).
 The on-hand stock balance of all your products
and materials (also known as the inventory
balance).

5.  If a small business has not maintained good inventory
records or has not updated its bills of materials with all
relevant changes, it may encounter serious problems with
the outputs of its MRP system.
 The problems could range from missing parts and
excessive order quantities to schedule delays and missed
delivery dates.
 At a minimum, an MRP system must have an accurate
master production schedule, good lead time estimates,
and current inventory records in order to function
effectively and produce useful information.
 Another potential drawback associated with MRP is that
the systems can be difficult, time consuming, and costly to
implement. Many businesses encounter resistance from
employees when they try to implement MRP.

6.  Manufacturing resource planning (MRP II) is
defined as a method for the effective planning of
all resources of a manufacturing company.
 Ideally, it addresses operational planning in
units, financial planning in dollars, and has a
simulation capability to answer "what-if"
questions and extension of closed-loop MRP.
 It is integrated planning of a company's material,
equipment and people to meet the Business Plan.
The integration requires that the same
information (Sales Forecast, Bill of Material, stock
records, actual works, purchase and customer
orders etc.) is used throughout the Company.

7. Trends Strategic plan
Demand management & Resource
management Business plan requirement
planning
objective
(Sales forecasting)
Master production Resource req.
scheduling
Reports
Inventory Transaction
MRP :
Inventory level -BOM
-Lead Time
MRPII
-Lot sizing Elements
-Planned purchase
-Performance
report reports
Capacity req. Buy
Planning(CRP)
Realistic Realistic
Factory coordination Supplier

8.  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

9.  a complete inventory management system
 production functionality
 costing functionality
 master scheduling and materials
requirements planning
 capacity planning
 work order management
 purchase order management
 sales analysis functionality and accounting
functionality

11.  Business Process Re-engineering (BPR) is
basically the fundamental re-thinking and radical
re-design, made to an organization's existing
resources. It is more than just business
improvising.
 The activity by which an enterprise reexamines
its goals and how it achieves them, followed by a
disciplined approach of business process
redesign. A method that supports this activity.
 It is an approach for redesigning the way work is
done to better support the organization's mission
and reduce costs. Reengineering starts with a
high-level assessment of the organization's
mission, strategic goals, and customer needs.