MRP, MRP II, and ERP systems are all used for inventory management and production planning but differ in scope. MRP focuses on scheduling materials for production. MRP II adds additional business functions like finance and HR. ERP is the most comprehensive, integrating all core business functions across an entire organization for real-time visibility and collaboration between departments. It offers automation, a single database, common interface, and integration of critical functions. Facility location and layout are also important considerations for production planning. Location selection involves choosing a country, region, and site based on operating factors. Layout refers to the internal configuration of a facility to optimize material and work flow.

1. OVERVIEW OF MRP, MRP II AND ERP

2. What is Manufacturing Requirements Planning?
Developed in the 1960s, Material Requirements Planning (MRP) systems for small
manufacturers were designed to schedule and handle inventory (raw material, parts,
and components, etc.). MRP is manufacturing-centric and focuses on controlling the
level of materials required in the production process. It helps you get answers to these
questions – What items are required for production? When it is required? How many
are required?
Simply put, these are the objectives of MRP:
To maintain minimum required stock
To ensure raw materials are available for production and finished goods are ready
for delivery on time
To seamlessly plan manufacturing activities

3. Introduction to MRP II
As mentioned above, MRP deals with the manufacturing process. MRP II includes managing the functional operations such as
coordination of different departments (manufacturing, finance, human relations, and production).
MRP II is comparatively a broader term. It manages resources (man, material, and machine) and addresses operational planning.
These are the basic modules/functionalities in MRP II:
Master Production Schedule (MPS)
Bill of Materials (BOM)
Item master data
Inventory control
Purchasing management
Shop floor control
MRP
Capacity planning and demand management
Sales and forecasting
Input/out control

4. What is ERP?
In short, ERP is the backbone of businesses.
ERP (Enterprise Resource Planning) is an extended version of MRP II, but a lot more comprehensive as it includes
all core business functions and processes, including manufacturing operations. In addition to production and
inventory, ERP systems also support financial and accounting management, sales, CRM, HR, service and support,
and more.
ERP is an integrated suite of business management tools that provides a continuously updated, and often real-time
depending on the solution, view of every department in the company. Whatever activity is done can be seen in a
single database with ERP.
This is what makes ERP different from MRP and MRP II. Employees can work from any corner of the world and
still collaborate with their colleagues, suppliers, and outsourcers.
ERP is different from MRP and MRP II because it offers:
Real-time visibility, insights, and collaboration
Automation of manual processes across the business
Single and consolidated database
A single and common user interface
Multiple modules to manage critical functions of an organization
Integration across functions, departments, and data

5. FACILITY LOCATION
Plant location may be understood as the function of determining where the plant should be located for maximum
operating economy and effectiveness. The selection of a place for locating a plant is one of the problems, perhaps
the most important, which is faced by an entrepreneur while launching a new enterprise.
Steps in Location Selection:
To be systematic, in choosing a plant location, the entrepreneur would do well to proceed step by step, the steps
be :
1. Within the country or outside;
2. Selection of the region;
3. Selectior of the locality or community;
4. Selection of the exact site.

7. FACILITY LAYOUT
Plant Layout, also known as layout of facility refers to the configuration of departments, work-centres and
equipment and machinery with focus on the flow of materials or work through the production system.