Written by abhi
April 16, 2011 Hits: 1417
According to Gene Thomas, who worked directly with IBM in the 1960s and was therefore at the forefront of the development of MRP/BOMP/LAMP, Manufacturing Requirements Planning (MRP) was happening in a number of large manufacturers such as John Deere, J.I.Case, and IBM. In 1963 he and others first “packaged the LAMP (Labor & Material Planning) system interfacing the BOMP summarized explosion with a time-series item master file and combined these efforts with IBM Industry development”. Material Requirements Planning or MRP is the effort of their collaboration. This application software serves as the method for planning and scheduling materials for complex manufactured products. Twenty years later, MRP had (Manufacturing Resources Planning) evolved into MRP-II, which was a more accessible extension to shop floor and distribution management activities. Enterprise Resource Planning, ERP, did not exist until the early 1990’s when MRP-II was expanded to include other areas like Engineering, Finance, Human Resources, and Project Management. By 2002, almost all ERP systems were becoming Internet Enabled, allowing customers worldwide direct access to the supplier’s ERP system.
MRP then was designed with a different focus than ERP. The purpose of MRP was to manage inventory and the processing of orders. Material Requirements Planning tracks demand (sales orders, forecasts) and inventory (materials in the warehouse), and then the software examines lead times, order quantities, safety stocks, and again calculates factory needs.
While MRP and its functions are still viewed as useful, the functionality has been incorporated into ERP since the 1990s. ERP was designed with a totally different purpose than MRP. ERP is meant to centralize a company’s operational processes such as: production, sales, schedule production, intangible assets, human resources, financial resources, and materials. It covered MRP’s tasks and added a new scope of functionality that had previously not come under the purview of MRP nor MRP-II. Its advantage is its ability to gather data from all areas of a business and apply it to analyze trends, predict future orders, discover problem areas, and improve completion times.
Clearly, both of these software systems can help optimize a business and modify procedures to better use primary resources, such as man power, materials, cash, and machinery. The caution here is they must be implemented correctly and then used properly. If the data entered is not accurate or needed, there is no way MRP or ERP can help. Employees need to be trained to use the software correctly, and understand the processes required to get the most out of the systems.