Material resource planning

Article By:

Giunipero, Larry C. Management Department, College of Business, Florida State University, Tallahassee, Florida.

Last reviewed:January 2020

DOI:https://doi.org/10.1036/1097-8542.409350

A formal computerized approach to inventory planning, manufacturing scheduling, supplier scheduling, and overall corporate planning. The material requirements planning (MRP) system provides the user with information about timing (when to order) and quantity (how much to order), generates new orders, and reschedules existing orders as necessary to meet the changing requirements of customers and manufacturing. The system is driven by change and constantly recalculates material requirements based on actual or forecasted orders. It makes adjustments to deal with possible problems prior to their occurrence, unlike traditional control systems, which looked more at historical demand and reacted to existing problems. Material resource planning (MRP II) evolved from material requirements planning when it was recognized that most of the major data needed to manage a manufacturing or distribution firm could be obtained from the material requirements planning information. The ability of a material resource planning system to meet the various needs of manufacturing, materials, and marketing personnel within a changing business environment contributed to its implementation by manufacturing companies. Enterprise resource planning (ERP) systems evolved from MRP II systems. ERP enabled companies to integrate business processes across all functions using one common database. ERP systems provide users with real-time information and are extensively used in both the manufacturing and services sectors. See also: Manufacturing engineering

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