TERM PAPER ONMRP II (MANUFACTURING RESOURCE PLANNING)

PresentedToDr.Neetha J. Eappen

OnMarch 13th, 2015

Submitted By:Tomin BabyP14215

AbstractThis paper talks about Manufacturing Resource Planning and various aspect related to it. From this we can clearly understand what actually Manufacturing Resource Planning means and how to relate to a manufacturing company. Here we are able to evaluate the reason for the success or failure of manufacturing resource planning implementation project. It mainly highlights the importance and full potential of MRP II. One of the article is about the Management guide to Manufacturing Resource Planning i.e., it all about proper guideline regarding implementing Manufacturing Resource Planning in any organization. Only by following proper guidelines we can ensure the success of implementationIntroductionManufacturing resource planning(MRP II)is a method of planning each and every resource in an organization particularly in manufacturing company. It is an incorporated method of operational planning in units, financial planning for the organization. It serves as an extension to MRP (Material Requirement Planning). Its not fundamentally software, for managing it we require peoples skills, then a commitment to database reliability and accuracy. Its all about total organization concept for using human resource and company resources more efficiently and effectively. Material requirements planning (MRP) and manufacturing resource planning (MRPII) are predecessors ofenterprise resource planning (ERP), a business information integration system.Benefits MRP II systems can provide: Effective control of stock , Better scheduling , Productive associations with suppliers for design or manufacturing: , Improved design control , Proper quality and quality control for financial and costing: , Concentrated working capital for stock , Improved cash flow through faster deliveries , Precise stock records.MRP versus MRP II MRP is manufacturing-centric: It aims at the scheduling and materials control aspects of construction to orders placed by customers. This confines its capability to foot production on demand forecasts. This differentiates it from MRP II, which tracks supplementary aspects of production, such as personnel requests, financial calculations, demand forecasts and business planning. MRP II is essentially more integrative and deliberately oriented than MRP, taking into consideration that it goes beyond the short term to weigh up the medium-term and long-term impacts of all production resources in the organization. MRPII goes several steps ahead of MRP. While MRP stopped up at the receiving dock, MRPII incorporates the value flow all the way through the manufacturing facility to the shipping dock where the product is packaged and deliver it to the final customerMRP II systems have been implemented in most manufacturing industries. Some industries need specialised functions e.g. lot traceability in regulated manufacturing such as pharmaceuticals or food. Other industries can afford to disregard facilities required by others e.g. the tableware industry has few starting materials mainly clay and does not need complex materials planning. Capacity planning is the key to success in this as in many industries, and it is in those that MRP II is less appropriate.MRP II is not a proprietary software system and can thus take many forms. It is almost impossible to visualize an MRP II system that does not use a computer, but an MRP II system can be based on either purchasedlicensed or in-house software. Almost every MRP II system is modular in construction. Characteristic basic modules in an MRP II system are: Master production schedule (MPS), Bills of Materials, Capacity Planning, Material Requirement Planning, aggregate planning, forecasting, business planning, cost management etcThe MRP II Hierarchy

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A Management Guide to MRP II: Manufacturing Resource Planning

Manufacturing Resource Planning is a valuable management system to have around. Correctly implemented and maintained, this sophisticated offspring of MRP( Material Requirement Planning) can ensure that various departments of manufacturing company- including inventory, marketing, engineering, production, accounting are working from a coordinated information base to meet company-wide objectives. Proper implementation is all about proper managementskill. Unfortunately, many of todays senior managers have not direct exposure to data processing environment. The following management guidelines should aid top management in avoiding the pitfalls other executives have already experienced and this will ensure the efficient and effective implementation of Manufacturing Resource Planning.

1) First and Foremost, the company has to be totally committed to the program.Implementation of a Manufacturing Resource Planning is very difficult to manage project. It requires higher level of management attitude and committed to implement that. People involved in it should have a proper idea about what it is. Management from the top level to bottom level must be prepared to take and show some interest in the program.2) The implementation organization has to be clearly definedIn addition to clear statement of management support, its important that the members of the project implementation team and their objectives are clearly identified to other within the company. It is also important that the MRP 2project managers are given direct access to the top management. Instead of implementing in the organization as full, first begin with the base level then moves into all departments.3) Allow ample time and resource for personnel training and education.Training and education have to be a continued part of any MRP2 approach. Education assistance cant be limited to one or two person. Many study courses are available to the managers to understand about it more clearly. Proper in-house training should be providedby expert in the market. Better training and education to the employees helps to perform the work as early as possible.4) Watch out for company political barriersUnfortunately, the larger the company, the more likelihood of internal political barriers. MRP II may be the first experience that the people have in their life and there will be lot of worries. There may issues inside and outside the organization. Sometimes there may have better relationships with each other.5) Keep internal communication lines openPoor interdepartmental communication is a close relative of political barriers, more likely to occur in large, structured organizations. Holding informal meeting involving top management, to get additional input and to reinforce the idea that the entire company is backing the plan.6) Key to success is planningIt is vital to adopt and follow a carefully thought out implementation plan, complete with achievable milestones, statement of expected results and clearly assigned responsibilities. The plan should be step by step process, with each step proven successfully before moving on. Earlysuccesses build confidence.7) MRP II requires meticulously kept data and recordsFor the system to be usable and show benefits in the early stages, every effort must be made to clean up your data as soon as possible. Establish data accuracy measurement criteria and objectives. Then compare results with objectives.8) Make sure you can get all the management information you need from the systemThis key concern has to be addressed before you embark on an MRP II project. When we are selecting an MRP II system it should not be rigid and it should be easily customized.All the above are the some of the basic guideline for effective implementation of MRP II. By following each guideline we are able to make effective management of Manufacturing Resource Planning system in the organization.

Success and Failure of MRP II ImplementationMRP II is a companywide, closed-loop manufacturing control system which integrates all aspects of manufacturing- materials control, shop floor control, requirement planning, finance, marketing and personnel. MRP II is designed to help managerscontrol complex manufacturing and business environments. For companies able to exercise effective system management, substantial benefits of integration are claimed by software suppliers, in term of improved control of production, productivity, and competitive performance.Factors Contributing to Success In this case its mentioned that success of Manufacturing Resource Planning should be related to the objectives set for implementation. However this relies on the same set of objective being adhered to throughout the course of the implementation. In some situation companys personal modified and redefined objectives as the implementation progressed. It could be argued that there is a need for some form of independent review of success in MRP II type implementations. Whatever the procedure used it must be detailed and thorough. However, a number of factors make it difficult to establish a truly objective criterion for MRP II success. In some organization there is better organizational environment to work as well as to perform, here were able to implement Manufacturing Resource Planning system very easily into the organization. Success of implementation mainly depends on the skills and efficiency of the managers who control and organize such thing in an organization. Time factor is also a vital importance in this, we should try to complete it as early as possible as having more delay there requires huge investment and along with that it may decrease the efficiency of the organization. Proper assembling and managing of material in the organization helps in proper implementation of Manufacturing Resource Planning in the organizationFactors Contributing to FailureHere we are going to see certain factors which slow down or stops MRP II implementation. These include factors emanating from the firms external environment, such as a decline in product markets and failure on the part of a software company. Most factors were internal and related to software changes, changes in key personnel, lack of top management support, lack of discipline, changes in deep-rooted practices, the exploration of alternative systems, resistance, the lack of a broad base of support for the change and political factors centred on ownership of the system. One source of external difficulty has to do with a decline in the firms product market during the implementation. Contextual factors played a significant role in attributions which referred to top management support. They focused on the impact which different management style, cultures and structures favoured by senior managers could have on Manufacturing Resource Planning implementation. There are several instances where there occurs failure of MRP II implementation due to lack of management support. Lack of discipline was blamed for many of the internal problems associated with implementation. Where disciplines were not being maintained people would quickly lose confidence in the accuracy of the system and could destroy the implementation.ConclusionMRPII systems begin with MRP, material requirements planning. MRP allows for the input of sales forecasts from sales and marketing. These forecasts determine the raw materials demand.MRPII facilitates the development of a detailed production schedule that accounts for machine and labour capacity, scheduling the production runs according to the arrival of materials. An MRPII output is a final labour and machine schedule. Data about the cost of production, including machine time, labour time and materials used, as well as final production numbers, is provided from the MRPII system to accounting and finance. It involves proper planning of all the resources in an organization. That will ultimately increase the overall productivity of the organization. From the above information, we are able to understand, whats this management guide is all about and it impact the MRP II. We are also able understand, what are the factors that influencing the success and failure of implementing MRP II. BibliographyHuther, W. H. (1983). A management guide to Manufacturing Resource Planning. Management Review , 42-50.Wilson, F., & Desmond, J. (1994). Success and Failureof MRP II Implementation. British Journal Of Management , 221-240.