Tool Box
Issue No. 27 - February/March
Planning your manufacturing system
by Mr Matthew Michalewicz
The Ins and Outs of Manufacturing Resource Planning (MRP II) Systems
As manufacturing and production becomes increasingly geared toward global markets, the popularity of Manufacturing Resource Planning (MRP II) systems continues to grow. In simple terms, MRP II systems plan and control the production and material flow in a company. They have their roots in the inventory control systems of the 1950s, as well as the Material Requirements Planning (MRP) systems of the 1960s and 1970s.
Later, during the early 1990s, MRP II systems formed the foundation of the much more holistic Enterprise Resource Planning (ERP) systems, which I’ll cover separately in future articles.
But what are the advantages and disadvantages of MRP II systems? and, more importantly, when is the right time for manufacturers to upgrade their existing systems?
Beginning with the advantages, it’s easy to reference many installations of MRP II systems that have produced very significant and tangible results.
As a case in point, Robern Menz, Australia's largest lozenge mint manufacturer and South Australia's largest confectioner, was able to recognize a 20% improvement in on-time deliveries through the use of resource planning software.
“The implementation is relatively new, but we are very happy with the results thus far,” said Richard Sims, Chief Operating Officer.
Other potential benefits of MRP II systems include:
- Reduction in ordering, production, and inventory carrying costs.
- Lower investment in equipment and plant.
- Reduction in assembly-line downtimes.
- Potential for increased profitability or increased market share due to cost and efficiency improvements.
- The ability for macro-level decision making by having access to consolidated data/information.
Sometimes, however, the results aren’t so rosy. The Nike/i2 Technologies debacle in ...
