History of MRP

History of MRP

Some previous posts have started to lay out what Material Requirements Planning is and what to look for in a MRP system.  Today’s post will deal with the evolution of MRP.

MRP systems for inventory management first came about in the 1940’s, and became increasingly used in the 1950’s.

  • The first MRP systems took a bill of materials for a specific finished product and exploded it into a production schedule and purchasing plan for the required components.
    Simple MRP
    • Focus on “order launching”
    • Used within production –not believed outside
  • Before long, MRP was expanded to include information feedback loops so that production personnel could change and update the inputs into the system as needed.
    Closed Loop MRP
    • Focus on production scheduling
    • Interacts with the MPS to create feasible plans
  • The next generation of MRP, known as manufacturing resources planning or MRP II, came about in the 1980s.  It added other functional areas or departments (such as engineering, accounting, marketing, finance, and human resources) into the planning process.
    MRP II (Manufacturing Resource Planning)
    • Focus on integrated financial planning
    • Treats the MPS as a decision variable
    • Capacity is considered (Capacity Resource Planning)
  • A related concept that expands on MRP is enterprise resources planning (ERP), which uses computer technology to link the various functional areas across an entire business enterprise.
    ERP Systems
    • Common, centralized data for all areas
    • Implementation is costly and effort intensive
    • Forces business rules on companies

Leave a Reply

Your email address will not be published. Required fields are marked *