An overview and exploration of the main differences between materials resource planning (MRP), materials resource planning II (MRP II) and Enterprise Resource Planning (ERP).
This paper looks at how material requirements planning (MRP or MRPI) was developed in the 1960?s, to enable companies to calculate the number of different components necessary and when they were needed. It traces its development over the years and identifes the main differences between materials resource planning (MRP), its predecessor materials resource planning II (MRP II) and Enterprise Resource Planning (ERP) as well as the pro’s and con’s of the MRP II concept. Using a basic diagram, the three fundamental functions of MRP are explained which are netting, batching and time phasing.
“Distinguishing MRPII from the original MRP concept is a simple process. MRPI is simply the process of identifying the amount of components required and at what time they are required. This developed into closed loop MRP, which calculated the workload required to fulfil the orders and compared this to the capacity available. MRPII expands on this by calculating the cost of proposed MRP runs, this allowed managers to identify viable production-runs and allowed them further control over the operation. In calculating the costs MRPII works in the opposite direction to MRPI, it starts at the lowest level of the BOM and works its way up until the net-requirements of the finished product is determined.”