What is it about?
Manufacturing Requirements Planning (MRP II) uses bill-of-materials (BOMs) based on manufacturing companies' product designs to schedule the order quantities and start dates for the purchase orders that replenish raw materials and shop orders that replenish work-in-process components and the finished goods products. MRP II is most effective when integrated within an ERP system that has high record accuracy for inventory and BOMs.
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Why is it important?
MRP II helps prevent shortages of raw materials and work-in-process components in the factory leading to the on-time delivery of quantities of finished goods per-sold to customers. For example, a large defense contractor such as Lockheed Martin uses MRP II to plan the release of purchase orders and shop orders to build fighter aircraft sold to the US Government. MRP II also helps reduce excess inventories by ordering just the needed quantities.
Perspectives
I worked for Lockheed Martin for 17 years in jobs related to MRP II. My coauthors and I leveraged our real world experiences in developing this paper. The paper helps readers understand the difference between ERP and MRP II. Also, the paper is a companion to another paper that discusses how ERP uses BOMs to control cost roll up in costing manufactured parts: " Assembly FG: An Education Case Study Using QuickBooks as the AIS for a Small Manufacturing Business" published in AIS Educator Journal.
Sherwood Lambert
University of West Florida
Read the Original
This page is a summary of: Assembly FG: An Educational Case on MRP II Integrated within ERP, Accounting Perspectives, March 2017, Wiley,
DOI: 10.1111/1911-3838.12136.
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