MRP II

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MRP II
While MRP I primarily address the inbound flow of inventory (materials management), MRP II adds other interfaces such as finance, marketing, and integrated logistics. Like MRP I, MRP II is a push inventory model which pushes product through manufacturing and distribution processes in order to meet forecast demand. However, it adds further dimensions to the basic model. MRP II not only considers the inbound flow of material, but also how much material can actually be handle within the plant. Furthermore, it actually handles production scheduling, labour needs, inventory budgets, and personnel needs. But the most important feature is the addition of the finance interface. This module provides the capability of transforming the operating production plans into financial terms, consequently the data can be used for financial planning and control purposes of a more general management nature. Another significant addition is the simulation module. This simulation capability enables management to perform a more comprehensive alternative planing work in developing the marketing and business plans. Operating variable could be regulated to examine the systemwide response to the proposed operating change.
Besides MRP II includes the entire set of activities involved in the planning and control of production operations. It consists of a variety of functions of modules and includes production planing, resource requirement planning, master production scheduling, materials requirements planning (MRP I), shop floor control, and purchasing.

Process of MRP II
Step 1 - Market Demand; the process begins with an aggregation demand from all sources. Examples of sources are firms’ orders, forecasts, and safety stock requirements.
Step 2- Production Plan; with inputs from manufacturing, finance, and marketing, the production plan would be derived.
Step 3- Rough-cut capacity planning; it involves short-term capacity considerations that are affected by irregularities in demand. It formulates benchmarks for the proper use of personnel, machines, and shifts. Bills of capacity and bills of labour resources are the primary inputs to determine rough-cut capacity. In the event of incapability in producing the require output (due to limitation of capacity), adjustment to the production plan would be made.
Step 4- Master production schedule; formulation of the master production sc...

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APICS THE PERFORMANCE ADVANTAGE, September 1997, Volume &, Number 9.

Types of Software and their Average Cost
Table above shows the different types of MRP II software and their respective costs. These softwares were ranked top ten in the 1997 MRP II software survey. (Ordered by number of installed users) Caliach MRP from Manufacturing and Computer System was ranked first with the highest number of installed users of 71000 with an average price of $20000. PC/MRP for Windows was ranked second with an extremely low average price of $395. The price Software Arts (Vendor of PC/MRP) is offering is one of the lowest in the market. Therefore, a company that does not want to invest too much on implementing MRP II, PC/MRP would make good choice.

Conclusion
Software itself cannot make a company successful MRP II user. However, the lack of a reasonably set of software can keep a company from succeeding. Therefore to ensure a company to be successful MRP II users, a detail study must be done in choosing the "right software” (in term of cost and capability), education and training must also done extensively, and accuracy and integrity of data must be enforced.

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