Operations Management Discuss the Nature Term Paper

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How does MRP II differ from MRP?

Material Requirements Planning (MRP) is the precursor to Manufacturing Resource Planning (MRPII) and both form the foundation for Enterprise Resource Planning (ERP) enterprise-wide systems. MRP's center of focus as a manufacturing system is on minimizing inventory levels and carrying costs. In addition, MPR systems are used for monitoring and improving manufacturing processes from sourcing and procurement through manufacturing planning and fulfillment. MRP systems often rely on the Bill of Materials (BOM) for order routing through production. This reliance on the BOM results in a limited amount of accurate data as to how production is actually performing relative to the other departments in a company. MRP II systems were designed to overcome the lack of visibility into longer-term production, pricing, sourcing and procurement, sales and marketing plans that had made manufacturing scheduling imprecise with MRP alone.

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MRP II acts as an enterprise-wide integration strategy, accumulating master production data, BOM, inventory positions, order management status, purchasing, shop floor control and manufacturing execution systems into a single database. This gives manufacturers much greater control over the many steps taken to produce their products. For build-to-order products, MRP II is essential, as the manufacturing processes used for these products require compliance to customers' specific requirements. MRP II is often called a closed loop approach to manufacturing in that it seeks to coordinate all factors that influence manufacturing demand and production efficiency. MRP II expands the production scheduling functionality of MRP by including business planning, master scheduling, workload optimization, supply chain planning and management, and measurement of results......

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