Material Requirements

Planning (MRP-I)

Manufacturing
Resources
Planning(MRP-II)
By
Muhammad Takmil Ahsan
 (MRP)

• MRP is Driven by the Master Production

Schedule (MPS).

• MPS is the process of determining the

Production needs in the form of Individual
Products.

• Plan for the Acuisition of Required Quantity

of Materials.
 (MRP)
• Instead of forecasting, actual orders are driving
Manufacturing System (make-to order).

• Just-in-Time (Japanese/TOYOTA Way) & ERP have

revolutionised the Manufacturing techniques.

• Materials and other Components are recieved in

right Quantity at the right time.
 Advantages of MRP
• Realtime Basis Updation
• It reduces inventory levels.
• It reduces Component shortages.
• Improves Shipping Performance and Customer
Service.
• Productivity and Production levels increase.
• Reduces Manufacturing Costs and Lead Times.
• Simplified and accurate Scheduling.
• Higher Production quality.
• Communication Levels Increase
 Material Requirements
Planning (MRP-I)
• MRP-I is only relavent to Materials

• MRP-I is a production planning

and Inventory Control System to
manage Manufacturing activities.

• A bill of material (BOM) is

maintained for each end product.
 Manufacturing Resources
Planning (MRP-II)
• Information System Based Technology
• Technological Advancements.
• Production & Operation’s Requirements
• Emergence of Manufacturing Techniques
• Materials and other Components are
recieved in right Quantity at the right time
 MRP-II Includes

• Modules to Handle Order Entry

• Scheduling
• Inventory Control
• Finance Accounting
• Financial Management & Needs
Assessments (Cash Planning)
 MRP-II maintains Records
• Lot Size
• Re-Order Level
• Lead Time Assessments
• Time Bucket
• Desired Ending Inventory Requirements
v Economic Order Quantity
● Required Units
● Cost per Order
● Cost per unit
● Carrying Cost etc.
 MRP-II Components

• Bills of Materials (BOM)

• Inventory Management
• Production Scheduling
• Capacity Planning (Tool, Labour
Machine etc)
• Job Costing ( Applied & Actual)
• Cash Planning (Capital Structure)
 Bills Of Materials

• Basic Component of MRP

• A bill of materials is the list of parts

used in manufacturing an item.

For Example : Structure, Handle,wheels

etc.
 Inventory Management

• MRP System Shows Realtime Status of

Inventory in Stock.
• MRP System Calculates net Requirements of
Parts & Components.

• Order Cycle
• Re-Order Level
• Re-Order Quantity
• Safety Stock
 Production Scheduling

• MRP System Describes the Processing

Schedules

• Define the Job Completion estimation

• Time Required to complete the Jobs

etc.
 Capacity Planning

• Each Tool, Labour, Machine etc in a Factory

has a Capacity
• Measured in hours usually

• Designed Capacity
• System Capacity
• Actual Capacity
• Licensed Capacity
• Rated Capacity
 Job Costing

• MRP System Tells the Cost & its Sequence

to be Incurred in Mfg

• Keeps Managers Aware of Both Expected &

Unexpected Costs (Applied & Actual)

• It is necessary to Estimate the cost of

production
Material,Labobur,FOH
 Cash Flows Management

• MRP System Maintains the record of Cash

Flows
• Ensures sufficient Funds for Materials,
Workers etc
• Helps in designing Capital Structure
• Record of Planned & Actual Cost Incurred
• Financial Reports are developed
 Summary of MRP

• An Information System
• Integrated with whole manufacturing
System
• Realtime based information available
• Decreases unnecessary Inventory
burden
• Effective & Efficient Planning &
Working
• Cost Efficiency Increases
Conclusion