Enterprise Resource Planning- Tosin Adeyeye.pdf

MRP, MRPII and ERP

1. MATERIAL REQUIREMENTS PLANNING (MRP) AND ENTERPRISE RESOURCE
PLANNING (ERP) MODELS.
(Prepared by TosinAdeyeye)

2. MATERIAL REQUIREMENTS PLANNING (MRP)
•Material Requirement Planning
(MRP) developed in the 1970s, is a
widely used approach for production
planning and scheduling in the
manufacturing industries.
•The main objective of MRP is to
determine which material is required,
quantity required and by when it is
required. It gives emphasis on
material inventory and physical
assets. MRP is designed to answer
three questions: what is needed? how
much is needed? and when is it
needed?

4. Materials Requirements Planning (MRP) Inputs
•Demand
•Bill of materials (BOM
•Inventory
•Master production schedule

5. Materials Requirements Planning (MRP) Steps and Processes
1.Identifying requirements to meet demand
2.Checking inventory and allocating
resources
3.Scheduling production
4.Identifying issues and making
recommendations

6. Materials Requirements Planning (MRP) OUTPUTS
•Execute on just-in-time (JIT) production.
•Schedule production based on material availability.
•Minimize inventory levels and carrying costs.
•Move materials through the workflow process
without delay.
•Plan of when materials should arrive, based on
when they’re needed in the production process, and
when subassemblies should be scheduled.

7. Materials Requirements Planning (MRP) Challenges
•An MRP can’t define the production
build timeline and materials required if
the data isn’t accounted for in the
inventory record, bill of materials and
master production schedule.
•The better a business understands and
documents its processes, the better an
MRP system can serve them. You need
to make sure youinput correct inventory
availability, time to complete a
subassembly, waste calculations and
lead-times from vendors. Otherwise,
your production schedule will be
inaccurate

8. Manufacturing Resource Planning (MRP II)
•Manufacturing Resource Planning (MRP II)
evolved from earlyMaterials Requirement
Planning (MRP)systems by including the
integration of additional data, such as
employee and financial needs. The system
is designed to centralize, integrate, and
process information for effective decision
making in scheduling, design
engineering,inventory management,
andcost controlin manufacturing.
•MRP II is a computer-based system that can
create detailed production schedules using
real-time data to coordinate the arrival of
component materials with machine and
labor availability.

9. Real-World Examples of Manufacturing Resources Planning (MRP II) Software
•IQMS
•Fishbowl
•FactoryEdge
•Prodsmart
•Abas
•Oracle NetSuite Manufacturing Edition
•Epicor
•S2K Enterprise

10. Material Requirements Planning (MRP I) vs. Manufacturing Resources Planning (MRP II)
Material Requirements Planning (MRP I) included the following three major functionalities:
•master production scheduling
•bill of materials
• inventory tracking
Manufacturing Resources Planning (MRP II)includes those three, plus the following:
• machine capacity scheduling
• demand forecasting
• quality assurance
• general accounting

12. Enterprise Resource Planning (ERP)
•Enterprise Resource Planning (ERP) was
built upon the existing functionalities of
MRP II software, these systems are used
to help plan, manage, and automate
operations such as supply chain
management, finances, project
management, staffing and manufacturing
to better serve an entire organization.
•Enterprise Resource Planning is a
computerized system designed to
connect all parts of a business
organization as well as key portions of
its supply chain to a single database for
the purpose of information sharing.

14. The Hidden Costs of ERP
1.Training
2.Integration and testing
3.Data conversion
4.Data analysis
5.Consultants ad infinitum
6.Replacing your best and brightest
7.Implementation teams can never stop
8.Waiting for ROI
9.Post-ERP depression

15. Benefits/Purpose of ERP
•Increased efficiency and productivity due to
automation and integration
•Better management and monitoring of compliance
with regulatory standards
•Enhanced communication and collaboration
between roles and departments
•Scalable business growth
•Improved partner and supplier management

16. Relationship Between ERP and MRP
•ERP and MRP go hand in hand to
optimize business operations. MRP
software acts as a subsystem of an
ERP solution, supplying information
about materials and resources to the
ERP solution, which integrates and
uses that data to inform other
business departments.
•For instance, a finance department
will use the information the MRP
solution provides to the ERP to
calculate accounts receivable and the
cost of production to determine
product prices.

17. Clear Difference between Material Requirements Planning
(MRP) and Enterprise Resources Planning (ERP)

18. REFERENCES
1.Stevenson, W. (2015). Operations Management (Twelfth ed.). New York, NY: McGraw-Hill Education.
2.Harleen, K. (2020). Difference between MRP and ERP.Retrieved from https://www.geeksforgeeks.org/difference-
between-mrp-and-erp/
3.Finch, C. (2021). ERP vs MRP: key differences and features.Retrieved from https://www.qad.com/blog/2021/06/erp-vs-
mrp-key-differences-and-
features#:~:text=The%20primary%20difference%20between%20ERP,%2C%20quality%2C%20processes%20and%20pl
anning
4.Jenkins, A. (2020). What is material requirements planning (MRP)?Retrieved from
https://www.netsuite.com/portal/resource/articles/inventory-management/material-requirements-planning-mrp.shtml
5.Hayes, A. (2020). Manufacturing resource planning definition. Retrieved from
https://www.investopedia.com/terms/m/manufacturing-resource-planning.asp