MANUFACTURING RESOURCE S PLANNING (MRP-II)

MANUFACTURING RESOURCE S PLANNING(MRP-II)

11/07/2020BBA - Semester I - FDP - Study Material -

Material Management1

MANUFACTURING RESOURCE PLANNING (MRP II)

The strategic business plan incorporates the plans of marketing,

finance, and production.

Marketing must agree that its plans are realistic and attainable.

Finance must agree that the plans are desirable from a financial

point of view, and

Production must agree that it can meet the required demand.

The manufacturing planning and control system, is a master game

plan for all departments in the company.

This fully integrated planning and control system is called a

Manufacturing Resource Planning, or MRP II, system.

It provides the mechanism for coordinating the efforts of

marketing, finance, production, and other departments in the

company.

MRP II is a method for the effective planning of all resources of a

company.11/07/2020

BBA - Semester I - FDP - Study Material -Material Management

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Enterprise Resource Planning:

Enterprise resource planning, popularly known as ERP.

ERP is a software package developed for optimum use of

resources of an enterprise in a planned manner. ERP

integrates the entire enterprise starting from the

supplier to the customer, covering logistics, financial and

human resources. This will enable the enterprise to

increase productivity by reducing costs. Once the ERP is

implemented, a single solution addresses the information

needs of the whole organization.





Functioning of ERP:

Suppose, an order is placed by the dealer, then the ERP

checks for the stock, reserves the inventory for dispatch,

opens the dealer account to verify the credit limit of the

dealer and processes the order. If the credit limit

exceeds, then it places hold on the order. All these

functions are carried out instantaneously, as ERP

integrates production, logistics, distribution, marketing ,

Human resource Development and finance.



Features of ERP:

Some of the salient features of ERP are –

1. Integrated Management Information:

Today’s business managers use ERP for

(a) Flexible reporting tools to extract the information as and when needed without depending on an information system department (MIS department)

(b) Electronic data interchange (EDI) to electronically accept customer information like purchase orders, schedule amendments or cash payments and electronically send order acknowledgement and invoices to customers.

(c) Imaging to provide the ability to display drawings or specifications, ability to store original sale orders, purchase orders, quotations, and contracts.

(d) Data base creation: Starting with time and attendance reporting, monitoring and control of machines and post-sales statistics.



2. Seamless Integration:

Integration of new product introductions or changes to existing products fully into the enterprise system, known as ‘engineering change management’, is crucial to the enterprise. The engineering change management should include electronic approval, routing, change-order process routing, revision-level control and automatic generation of product structures.

3. Supply Chain Management:

End-to-end supply chain management is crucial for enterprises having multiple manufacturing units and distribution networks. Intelligent Resource Planning (IRP) is used to optimize the overall flow of demand and supply data and build relationship between various activities to optimally identify the demand supply chain.

4. Resource Management:

To facilitate effective management of equipment resources, on line records of equipment location and status need to be kept and proper accounting methods need to be followed in respect of operating cost and maintenance costs.

To manage human resources effectively, functions such as employee database job descriptions and evaluations, applicant tracking, performance review, cost benefits, creating alternate organization structures, taking care of training needs. To facilitate total quality management (TQM), the ERP provides for quality planning required for ISO 9000 certification.





Scope of ERP:(a) Financials :

Financial accounting, treasury management, asset management and

enterprise control.

(b) Logistics:

Production planning, materials management, plant maintenance, project management, sales and distribution management.

(c) Human Resources:

Personnel management, training and development and skills inventory.

(d) Work flow:

Integrates the entire organization with flexible assignment of tasks and responsibilities of locations, positions, jobs, groups or individuals.



Benefits of ERP:

ERP brings together, people who work on shared tasks within the same enterprise or in their dealing with suppliers and customers and ensures the smooth flow of information at all levels and accessibility to up-to-date information.

Some of the Tangible benefits of ERP are –1. Reduction of lead time by 60%

2. 99% on-time shipments

3. Reduction of cycle time to 80%

4. Reduction of work-in-process inventory to 70%

Some of the Intangible benefits are-1. Better customer satisfaction

2. Improved vendor performance

3. Reduced quality costs

4. Improved resource utilization

5. Improved information accuracy



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MANUFACTURING RESOURCE S PLANNING (MRP-II)