Manufacturing Resource Planning (MRP II): Enhancing Efficiency and Control in Manufacturing


Manufacturing Resource Planning (MRP II) is an advanced planning and control system designed to optimize manufacturing processes and resource utilization. It provides a comprehensive framework for managing production, inventory, scheduling, and other critical aspects of manufacturing operations. In this section, we will delve into the academic details of MRP II, its key components, implementation steps, and illustrate its benefits through an example.

Definition and Components of MRP II: 

MRP II is an integrated system that combines material requirements planning (MRP) with additional modules for capacity planning, shop floor control, master production scheduling, and other functions. Its core components include:

a. Master Production Schedule (MPS): MPS sets the production schedule for finished goods based on customer orders, forecasts, and inventory levels. It ensures alignment between production plans and demand.

b. Bill of Materials (BOM): BOM lists the components, raw materials, and sub-assemblies required for manufacturing a product. It specifies the quantities and relationships between the items.

c. Inventory Management: MRP II optimizes inventory levels by considering lead times, safety stocks, reorder points, and economic order quantities (EOQ). It ensures availability of materials while minimizing carrying costs.

d. Capacity Planning: MRP II evaluates the capacity requirements for production processes, including labor, machinery, and facilities. It helps balance capacity with demand, identifies bottlenecks, and improves resource allocation.

e. Shop Floor Control: This module tracks and manages the progress of production activities on the shop floor. It includes functions like work orders, routing, scheduling, and tracking of work-in-progress (WIP).

f. Purchasing and Procurement: MRP II facilitates the procurement process by automating purchase requisitions, supplier selection, order placement, and tracking of materials and components.

Implementation Steps for MRP II: 

Implementing MRP II requires careful planning and execution. The following steps provide a structured approach:

a. Assessment and Preparation: Evaluate the organization’s readiness for MRP II, including infrastructure, data accuracy, and employee training. Define goals, scope, and expected benefits.

b. Data Gathering and Integration: Collect accurate data on product structures, bills of materials, inventory levels, lead times, capacity constraints, and other relevant information. Integrate data into a centralized MRP II system.

c. System Configuration: Configure the MRP II software to align with the organization’s specific manufacturing processes, requirements, and policies. Define planning parameters, production rules, and scheduling policies.

d. Training and Change Management: Provide comprehensive training to employees on MRP II concepts, functionalities, and system usage. Manage change by addressing potential resistance and promoting employee engagement.

e. System Testing and Validation: Perform thorough testing of the MRP II system to ensure accuracy, data integrity, and proper integration with existing systems. Validate the results against real-world scenarios.

f. Go-Live and Continuous Improvement: Gradually transition to the live MRP II system, closely monitor its performance, and gather feedback. Continuously improve processes and optimize system usage based on data-driven insights.



Manufacturing Resource Planning (MRP II) is a comprehensive system that integrates various components to enhance efficiency, control, and coordination in manufacturing operations. By implementing MRP II, companies can achieve optimized production schedules, inventory levels, capacity utilization, and procurement processes. It promotes accurate planning, reduces lead times, and improves overall operational performance.

Lets checkout difference from MRP-1

Key Difference between MRP-I and MRP-II



  • Primarily focuses on material planning and inventory management.
  • Manages the timing and quantities of raw materials, components, and subassemblies required for production.
  • Provides a structured approach for determining material requirements based on the production schedule and bill of materials.


  • Generates material requirements and procurement schedules based on the master production schedule (MPS) and bill of materials (BOM).
  • Assists in maintaining optimal inventory levels, avoiding stockouts or excess inventory.
  • Provides visibility into material availability and tracks the progress of materials through the production process.


  • Primarily operates within the boundaries of the materials management function.
  • Provides information and outputs related to material requirements and procurement.

Decision Support:

  • Assists in making informed decisions regarding material planning and procurement based on production needs and inventory levels.


Overall Management Perspective:

  • Focuses on managing material flow and availability for production purposes.
  • Provides visibility into material requirements and aids in maintaining optimal inventory levels.



  • Encompasses a broader scope, integrating material planning with other aspects of manufacturing operations.
  • Manages not only materials but also production scheduling, capacity planning, shop floor control, and resource allocation.
  • Takes into account additional factors such as labor, machine capacity, and other resources required for production.


  • Incorporates all the functionalities of MRP.
  • Extends beyond material planning to include the scheduling and coordination of production activities.
  • Enables capacity planning and resource allocation to optimize production efficiency.
  • Provides shop floor control capabilities to monitor and manage activities on the production floor.


  • Integrates various functional areas of the organization, including materials, production, finance, and sales.
  • Enables data sharing and coordination among different departments.
  • Facilitates collaboration and information exchange between production planning, scheduling, and other relevant functions.

Decision Support:

  • Offers advanced decision support capabilities beyond material planning.
  • Provides insights into production scheduling, capacity constraints, resource utilization, and potential bottlenecks.
  • Facilitates data-driven decision-making by considering multiple factors and dependencies.

Overall Management Perspective:

  • Takes a holistic approach to manufacturing management.
  • Considers the broader picture, including production scheduling, capacity planning, shop floor control, and resource management.
  • Enables organizations to align their production activities with overall business goals and strategies.