MRP is a scientific technique for planning and scheduling materials requirement for production. It combines inventory control with the production planning under dependent demand condition, utilizing inputs from MPS, Bills of Materials (BOM) and Inventory Status Report (ISR). MPS, as explained earlier, expresses the aggregate plan in terms of specific items.
BOM expresses how the end product is to be manufactured, duly detailing all subcomponents or sub-assembly items, their sequence and quantity, work centres performing the respect job sequence, etc. ISP, on the other hand, provides detailed information on inventory status of every item. Such status report also contains information on safety stock level, procurement lead time, vendor rating details, etc.
MRP helps in reducing inventory and lead time (both for production and delivery), giving more realistic and achievable delivery schedule to customers and finally helps in increasing efficiency.
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A typical MRP Report for a single item may look like this:
Manufacturing Resource Planning (MRP-II):
We have seen that MRP only helps in Scientific Production Planning, synchronizing input information from MPS, BOM and ISP. MRP-II, on the other hand, synchronizes all aspects of the business plan, duly coordinating all functional areas of business, like Marketing, Materials Manufacturing, Finance and Personnel. The process helps to integrate business plans with production plan using a closed-loop MRP.
Production-Related Forms:
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To enforce proper production management and control, many organizations nowadays make use of computer-generated production reports and forms. Some of the computer generated forms that are related to production are illustrated here.
