What is Manufacturing Resource Planning?

Manufacturing resource planning is a term for a kind of “master plan” that includes all of the resources of a manufacturing company. Those within the planning community identify modern manufacturing resource planning as MRP II, which has some additional improvements over the original MRP, or Material Requirement Planning, system that had a smaller scope mainly related to the use of materials. As a guide for overall planning, MRP II is helpful in any business that includes a manufacturing element.

Manufacturing resource planning is defined by the APICS, originally the American Production and Inventory Control Society, now the Association for Operations Management. This non-profit association studies operations management, which includes such factors as product planning, management of information systems, resource allocation, and much more. APICS also provides certifications for the manufacturing field and other resources for companies that deal with industrial manufacturing processes.

Manufacturing resource planning is meant to address both operation planning in units, and financial planning in dollars. That means an MRP II plan would cover how much the company produces, and how it uses capital. Supply chain management is a big part of MRP II, but so is efficient use of software and IT resources.

Experts are quick to point out that manufacturing resource planning is not just a technical tool, but a combination of software and human decision making. In other words, good MRP II needs “people skills” applied to software tools in order to be productive. This kind of idea is fundamental to a lot of different new planning technologies that businesses are using to chart their futures.

Elements of a manufacturing resource plan include a Master Production Schedule, which brings together all relevant factors of production, as well as things like Shop Floor Control or Capacity Planning. In terms of finances, manufacturing resource planning can incorporate general ledger, Accounts Receivable and Accounts Payable, cost reporting, purchasing management, and more. Other more precise items like Lot Traceability, Tool Management, and Shop Floor Data Collection may also factor into a MRP II system for a company.

As relational database technology improved, and the cost of digital planning tools continued to decrease, businesses began to use both MRP and MRP II options. These have now given way to an even broader option for management: ERP or Enterprise Resource Planning. ERP has edged out the use of MRP II in some companies, but the fundamental idea is the same; businesses use complex digital tools to aid in nearly every piece of the decision making they do about a company’s production, finances, and logistics.