Did you know material requirements planning, or MRP, is celebrating its 40th birthday? The strategy was originally created to help manage the materials used by manufacturers so that they would know exactly what supplies they needed for maximum production and exactly how much of these supplies. Later the term MRP came to represent manufacturing resource planning, as the concept encompassed more end-to-end operations.
MRP and Its Relative, ERP
Sound familiar? It might if you’re already familiar with ERP, enterprise resource planning, which also strives to coordinate end-to-end operations for a more streamlined business approach. Knowing how MRP breaks off from the family tree that includes ERP, and also how the two processes are alike, will help you understand how the processes can help your organization.
Beyond the Shop Floor
In the beginning, material requirements planning meant MRP that gave manufacturers the information necessary to order the right amounts of inventory and when to order them. Later, the term was coined MRP II because it meant manufacturing resource planning and could open doors to information about things like invoicing, paying employees and the operation’s strategic capacity – not to mention planning for the day-to-day operations at the ground level. MRP had come to mean so much more than nuts and bolts, and today it continues to encompass end-to-end strategic planning for your organization’s optimum success.
New Features Revved Up MRP
You may not hear as much about MRP today as you likely are to hear about ERP. This is because in many ways, ERP became the broad framework for MRP strategies. It started when MRP (material requirements planning) became MRP II (manufacturing resource planning) by adding new features for managing manufacturing inventory, like scheduling, and advanced ways to track products according to current and future strategies. When the ability to capture data from even more cross-divisional operations were added, like human resources, customer service and total financials, the MRP II system came to be known more often as ERP.
MRP Modules Can Live Within ERP
When purchasing an MRP system, think of it as a branch from the ERP family tree. The concepts for ERP are the sturdy foundation and the trunk of the tree, but MRP can branch off and give you precise modules for controlling manufacturing that fit within your larger framework of ERP. MRP systems can help you record and analyze your production, including how data matches up against your business forecasting, with the end result of greater efficiency.
MRP Features Translated into Software
There are many ways you can benefit from specific MRP applications within your ERP package. For example, Made2Manage from Consona ERP can give you push-button automation for your manufacturing, with all data utilizing a centralized platform which everyone in your organization can access. In terms of supply-chain management, Made2Manage matches up your customers’ requests for products with your organizational capacity, so you get the best outcomes from all your resources. With its CRM tool for Made2Manage, Consona is enables you to give the best-tailored support to your customers before and after you close new deals.
Microsoft Dynamics AX can also give you some interesting MRP-like features, allowing you very detailed information on your usage of materials and ways to implement pricing incentives. Some organizations have used the tool to help create fine-tuned production shifts that can make the most of their production capacity.
Shaded Past? Well, Sort Of …
Ok, so the past of MRP isn’t exactly shady, but if you consider its beginnings in non-computerized data entry, the piles of manual work previously associated with tracking and managing inventory must have felt like a shadowy place for many organizations.
Fortunately, today’s advanced MRP theories – incorporated as stand-alone modules focused on inventory or within ERP systems – are allowing you to coordinate business divisions, strategic plans, financials, customer relationships and product management that make everyone in your team feel like part of the family.