Here are some of the important differences:. As in the past, MRP software vendors today are taking advantage of new technologies to improve their products and offer more capabilities to users.
Foremost on the list is the application of machine learning and artificial intelligence AI in advanced planning processes to allow the systems to develop even better plans and schedules. Machine learning-enabled planning systems continually monitor conditions and activities to develop more precise models on cause and effect — so that its future recommendations are more comprehensive, more precise, and more effective. IIoT is the general term for the proliferation of inexpensive, smart, connected sensors and devices that can be used to monitor and control virtually anything and everything throughout the entire supply chain.
IIoT brings vastly greater quantities of data into the planning systems that feed the AI and machine learning engines. The cloud also offers better security, higher availability, and more reliable and sustainable systems through disciplined back-up, fail-over, and disaster recovery. Finally, in-memory databases bring unprecedented performance speed to MRP systems, for significantly faster response times.
Any MRP overview is a snapshot of a living organism. In more than a half-century of development and growth, MRP has progressed from a relatively simple and straightforward calculation to become a comprehensive, intelligent, and vital decision-support system. It offers effective, efficient, and responsive planning and management for any organization that turns components into products to meet customer demands.
See how new ERP systems can help you streamline production processes and respond to changes in demand and material availability in real time. MRP is the function or software module that calculates material acquisition plans — purchase and manufacturing orders — needed to meet production plans and customer demand.
When combined with supporting applications like engineering, inventory, purchasing, and production control, the software suite is called manufacturing resource planning or MRP II.
In the mids, MRP II was renamed enterprise resource planning ERP to reflect its broadened scope and distinguish newer, more capable versions from more limited predecessors.
The original MRP function or module is the calculation of material requirements. When combined with supporting applications, such as customer orders, inventory, engineering, purchasing, production control, finance, and accounting, the suite is called manufacturing resource planning, or MRP II.
MRP has been and remains the core planning approach in nearly all modern manufacturing information systems. MRP is the function or software module that calculates the need for materials and recommends production and purchasing activity orders to satisfy those demands. MRP planning is the process of exercising those calculations to develop a plan.
MRP is a core part of nearly all integrated information management systems for manufacturers, called enterprise resource planning or ERP. The master schedule, or more properly the master production schedule MPS , is a build plan for sellable products, consisting of planned production quantity, start date, and due date.
The master schedule represents the manufacturing activity needed to meet net demand. Net demand is customer orders, forecasts, or a combination of these minus available inventory.
DDMRP focuses on triggered replenishment of materials through the network using buffer inventory levels and replenishing them when they fall below defined target. This allows the planner to evaluate possible scenarios early in the planning stage. This insight into capacity issues helps in the final decision to make the product or buy the product or materials.
Supply chain planning is a general term that includes all the planning activity needed to make the right quantities of the right products at the right time to satisfy demand. Supply planning includes master scheduling, MRP, resource planning, capacity planning, and advanced planning systems as appropriate.
Demand is the quantity and timing of customer orders and forecasts. All planning and execution activity within a manufacturing organization is aimed at meeting demand. Demand planning and demand management are the processes and applications that accept, recognize, and handle demand information.
You can use the Overwrite and Append plan level options to limit how the planning process reacts to firm planned orders and to stabilize the short term material plan. When you enter All in the Overwrite field, the planning process overwrites all entries, planned and firm planned, from the current material plan.
When you enter None in the Overwrite field, the planning process does not overwrite any firm planned orders. It does, however, overwrite any suggested planned orders that are not firm. When you enter Outside planning time fence in the Overwrite field , the planning process overwrites all entries from the current plan, planned and firm planned, outside the planning time fence, and overwrites only planned orders inside the planning time fence.
It does not overwrite any firm planned orders within the planning time fence. The planning time fence can be different for each item, so the planning process looks at the planning time fence for each item when choosing what to delete.
When you enter No in the Append Planned Orders field, the planning process does not append any planned orders to the current plan. Additional demand does not cause planned order recommendations. Instead, the projected quantity on hand may go negative in response to demand that was not met by a suggested planned order. When you enter Yes in the Append Planned Orders field, the planning process appends additional planned orders after the last entry on the current material plan to meet any additional demand.
This option allows you to create a new material requirements plan for the plan name you specify, deleting all previous planned and firm planned entries while regenerating new planned orders. You can use this combination the first time you run your plan or if you want your plan to reflect all sources of new demand. The planning process always suggests planned order s. You can change planned orders to a firm status using the Items window in the Planner Workbench.
This option allows you to create an extension to the material requirements plan for the plan name you specify, deleting planned and firm planned orders outside the planning time fence and deleting all planned entries inside the planning time fence for each item.
The planning process creates appends new planned orders after the planning time fence date. You can use this combination to stabilize the short-term plan and allow the long-term plan to react to new sources of demand.
Note: If an item has no time fence specified and this option is chosen, all planned and firm planned orders are overwritten. Then the resulting material plan would have the following suggestions for planned orders, assuming the planning time fence is FEB:. If it was firmed, the process would not overwrite the entry.
When you choose not to overwrite an existing plan, the planning process does not overwrite existing firm planned orders, but deletes any suggested planned orders. The planning process then creates appends new planned orders after the planning time fence date.
This is analogous to firming sections of your short-term material requirements plan. You can extend the plan horizon without altering existing firm planned orders. However, the planned entries are deleted. Although additional demand exists on the MDS, no planned orders are suggested until the planning time fence on FEB. In this case, the planning process does not overwrite existing firm planned entries, but deletes any suggested planned orders.
In addition, it does not append additional demand to the end of the plan. Instead, it reports the instances where the material requirements plan is out of balance with the master demand schedule, and allows you to solve these problems by manipulating the plan manually. This gives maximum control to the material planner. For example, if an existing material plan has the following orders:.
In this case, the projected quantity on hand would go negative since no planned orders were suggested to meet the additional demand. The material planner can use on-line inquiries and reports with exception messages to identify material shortages.
Gross to net explosion is the process that translates using assembly requirements into component requirements, taking into account existing inventories and scheduled receipts.
Component due dates are offset from the due date of the using assembly by the lead time of the assembly. The gross to net explosion process determines, for each item, the quantities and due dates of all components needed to satisfy its requirements. In the following diagram, the suggested planned orders for the end assembly are offset by the lead time, one period, and passed down to the component during the planning process.
The planned order for the end assembly in period 2 becomes the gross requirements for the component in period 1. In period 1, the gross requirements and the safety stock level 50 represent the total demand. The scheduled receipts and quantity on hand 20 represent the total supply. The net requirements, total demand minus total supply , equals There is no recommendation for safety stock in each period unless the demand in that period is driven less than the safety stock level.
Note: Planned orders in period 4 are not suggested since the projected on hand is at the safety stock level. You calculate material requirements by launching the planning process from the Launch Planning Process window.
The phases of the planning process that calculate material requirements are the:. When you specify a new anchor date, the maintain repetitive planning periods phase uses that date as its new starting point for calculating repetitive planning periods.
Note: This step is performed for plans that have the Production flag enabled. The recommendations generated by the planning process feed the capacity requirements planning, shop floor control, and purchasing activities of the organization. You can choose to lock tables during the snapshot process to guarantee consistent data.
Locking tables controls the degree of read consistency. With unlocked tables, you can still get a high level of data consistency. However, if you feel you must lock tables, tables lock for only a brief period, reducing inconvenience to users.
Consider a situation where you have a subinventory with a quantity of units, and a discrete job for 25 units. Between the time the snapshot reads the inventory information and the time the snapshot reads the discrete job information, 10 units are completed from the job. If you ran the snapshot and choose to lock tables, you would guarantee that the snapshot would read either units in the subinventory and 25 units outstanding on the discrete job, or units in the subinventory and 15 units outstanding on the discrete job.
If you ran the snapshot and selected not to lock tables, there is a chance the Snapshot would read units in the subinventory and 15 units outstanding on the discrete job. The chances of inconsistencies caused by launching the snapshot without locked tables is remote.
The results you get from locked tables are better than those you get from the unlocked tables. However, you can still choose to run the Planning Engine with unlocked tables. The planning process time-phases material requirements and expresses future demand, supply, and inventories by time period.
Time-phasing delays release of orders for components until they are needed and offsets the requirements by item lead time lead time offset. Oracle MRP plans to the exact date of demand, although some reports and inquiries show requirements bucketed by weeks or months.
If you execute the planning process on a non-valid workday, the planning process considers the next valid workday as the day the plan is generated.
For example, if you execute the planning process on a Saturday, the planning process would generate planned orders at the earliest for the following Monday.
The planning process considers past due supply and demand as if it were due today in other words, the start date of the plan.
Reports and on-line inquiries that bucket demand in weeks or periods show past due demand in the first bucket. The material scheduling method controls how the planning process calculates the exact date of demand: the start date of the operation generating the demand, or the start date of the order generating the demand. For each material requirement, the planning process schedules material to arrive in inventory on the day that corresponds to the method you choose.
This affects time-phasing of requirements for discrete jobs, flow schedules, repetitive schedules and planned orders. See: Material Scheduling Method Example. Lead time percent is used when you choose a material scheduling method of Operation start date when launching the planning process. For a particular operation, the lead time percent is the percent of total lead time from the start of the first operation on the routing to the start of the current operation.
Oracle Bills of Material calculates lead time percent values when you calculate manufacturing lead times. Oracle MRP uses the lead time percent to schedule material requirements at a particular operation. Oracle Capacity uses the lead time percentage to plan capacity requirements at a particular operation. You calculate the processing lead times for assemblies in Oracle Bills of Material. For a particular assembly, the processing lead time is the sum of the operation lead times for the standard routing of the assembly.
Oracle Bills of Material calculates fixed and variable portions of lead time for your manufactured items. You can use dynamic lead times to accurately compute start dates for planned orders generated by Oracle MRP. Dynamic lead times are more accurate than fixed lead times because lead time can vary based on order quantity.
You can set the following parameters in the Plan Options window:. Suggestion: It is recommended that you use the All planned items option, to avoid missing items you want to plan and to guarantee that all sources of demand are considered by the planning process. Under certain circumstances, including demand schedule item components or supply schedule item components only may mean that not all demand for an item appears in the material plan.
You are manufacturing a computer that has a lead time of five days. The last operation step in assembling the computer is to attach the label on the case of the computer. The label is not actually required until the fourth day of the assembly process. If the planning process recommends a planned order for 10 computers to be completed on day 5, and you choose the material scheduling method to be Operation start date , the planning process schedules the component requirements for the label to be required on day 4.
If you choose a material scheduling method to be Order start date , the planning process schedules the component requirements for the label to be required on day 1 i. Suggestion: You might choose scheduling to Order start date so that all the components are issued at the start of the job. This can save time and paperwork, especially for items with short lead times. You might choose scheduling to Operation start date if your lead times are long or have expensive inventory carrying costs for your components.
This method plans the demand for the component based on the start date of the operation where it is required. You can set this method for all material plans in the Define Planning Parameters window, and override your choice for individual material plans. The netting parameters allow you to control the different sources of visible supply and demand when calculating net requirements.
Supply Chain Planning users can net subinventories for multiple organizations. You can also override these default options for individual plans, from the Plan Options window, when you generate a plan.
Note: You assign a netting type when you define a subinventory in Oracle Inventory. The planning process considers the inventory in a nettable subinventory as supply. You can override the netting type for a specific subinventory when you launch the planning process. When you choose to net purchases, the planning process considers approved purchase requisitions and approved purchase orders as scheduled receipts supply. If you do not choose to net purchases, the planning process ignores this purchasing information.
Note: This option may be useful when performing simulations to see the impact on the material plan if scheduled purchase receipts are not available as supply. The planning process ignores unapproved purchase requisitions, but plans using approved requisitions and both approved and unapproved purchase orders as valid scheduled receipts.
Note: The planning process only nets purchase requisitions and purchase orders that have a purchasing location that is associated to the inventory organization launching the MPS, MRP, or DRP. Oracle Purchasing requires a promised-by date or need-by date on a purchase order for planned items.
If only one of these dates is defined, the planning process considers the date specified either the promised-by date or need-by date to be the dock date for the purchase order. If you have defined both dates on the purchase order, the planning process considers the promised-by date to be the dock date when calculating order dates.
Need-by date: On a purchase requisition and purchase order, this is the internal date of need. Dock date vs. Otherwise, the need-by date is the dock date. To the dock date, the planning process adds post-processing lead time to arrive at the order planning date: the date that the planning process plans the supply as available for use. The planning process considers receiving inspection inventory by calculating a planned receipt date.
The post-processing lead time for the item is added to the dock date to determine the planned receipt date. The purchase order quantity in receiving is considered as available supply on this calculated date. The planning process plans internally sourced requisitions in the same manner as it plans externally sourced requisitions. Oracle MRP recommends that you set up a separate Planner Code and associate it to your internally sourced items.
This lets you manage your planned internal requisitions by requesting key reports and windows using the Planner Code associated to your internally sourced items. When you choose to net WIP, the planning process considers work in process standard and non-standard discrete job, flow schedules, and repetitive schedules as scheduled receipts supply.
If you do not choose to net WIP, the planning process ignores work in process standard and non-standard discrete jobs, flow schedules, and repetitive schedules, regardless of MRP netting information defined on these entities. The calculation of WIP supply and demand is affected by several attributes defined on the discrete job. Assembly supplies and component demands from standard discrete jobs with the following statuses are included:.
A non-standard discrete job controls material and collects costs for miscellaneous manufacturing activities. For example, these manufacturing activities may include activities with no defined standards, such as items without a bill of material and routing.
Since Oracle MRP uses different planning algorithms for repetitive manufacturing, repetitive schedule statuses do not impact how repetitive schedule supplies and demands are viewed. Assembly supplies and component demands from non-standard discrete jobs with the following statuses are included:. Since a non-standard discrete job is created manually and does not explode a bill of material, it does not automatically create material requirements. Oracle MRP recognizes only these requirements.
Note: The planning process does not recommend rescheduling of existing non-standard jobs. The net quantity may differ from the job quantity for many reasons. For example, you would set the net quantity to zero if you receive the discrete job quantity into a non-nettable completion subinventory. When you choose to net WIP, the planning process uses the MRP net quantity on the order header to calculate available supply. At the component level, you can enter a value for the MRP Net field to establish if the planning process should net the requirement when calculating component demand.
You may choose to enter No for a particular component if it is issued from a non-nettable subinventory. When you choose to net WIP, the planning process uses the MRP net value at the component level to determine if the component requirement is included as demand.
If you specify a WIP supply type of supplier for an item or component, the planning process ignores the requirement. You can define negative usages for component items on a bill of material in Oracle Bills of Material. You can add negative requirements byproducts to discrete jobs using Oracle Work in Process. Oracle MRP includes negative requirements on standard and non-standard discrete jobs and components with a negative usage on a bill of material when netting supply and demand.
This type of component requirement is considered as supply available on the job completion date. Note: You can manually add a negative requirement to a non-standard job in Oracle Work in Process to manage components that result in disassembly.
You could use this option for repairing assembly units. It allows you to track the item that is issued to the job as available supply on completion of the repair job. When you choose to net reservations, the planning process recognizes hard reservations that represent sales order demand.
If you do not choose to net reservations, the planning process recognizes all sales order demand as soft reservations only. The planning process always plans to satisfy hard reservations before soft reservations. Note: By definition, sales order demand is a soft reservation.
A hard reservation is sales order demand that you firm by reserving selected inventory for the purposes of material planning, available to promise calculations and customer service issues. Engineering change planning involves planned modifications of bills of material. These planned changes affect the demand calculated and the orders rescheduled or created by the planning process.
Oracle MRP evaluates the engineering change orders as of their scheduled effective date. You can order material and plan resources that you need for new revisions ahead of time. Note: The planning process only suggests implementing engineering change orders when the start date of the planned order is later than the effective date.
For a pending ECO, you can specify whether to include the engineering changes during the planning process. Oracle MRP considers engineering changes when generating component requirements for planned orders and suggested repetitive schedules. The quantity specified by an engineering change order is considered if the scheduled effective date of the ECO is before the suggested start date of the order. Assembly A has a lead time of 2 days. Component B has a usage of 2.
You defined an engineering change order that changes the usage of B to 3. The ECO has a scheduled effective date of Day 4.
If the material plan for Assembly A is:. The planned orders for Assembly A with due dates of Day 4 and Day 5 have start days of Day 2 and Day 3 respectively when offset by the lead time of 2 days.
Since neither planned order has a start date that is on or after the scheduled effective date of the engineering change order, the component requirements are generated based on the current bill of material that specifies a usage of 2 Bs. The planned orders for Assembly A with due dates of Day 6 and Day 7 have start dates of Day 4 and Day 5 respectively when offset by the lead time of 2 days.
Since both planned orders have a start date that is on or after the scheduled effective date of the engineering change order, the component requirements are generated based on the revised usage of 3 Bs. The use-up date determines when the current on-hand quantity for an item is exhausted based on projected gross requirements.
This date is calculated for all items during the planning process. The use-up date is calculated by applying on-hand quantity in inventory supply against any gross requirements demand , and adding the next work date to the day it is depleted. The planning process does not consider repetitive schedules as supply when calculating the use-up date.
Oracle MRP calculates, based on the projected gross requirements for this item, that the current quantity on hand is exhausted on Day 4. Therefore, the planning process sets the use-up date for this item to be Day 5. When you define a revised item for an ECO, you can specify whether the planning process should recommend a suggested effective date for the revised item. If you indicate that the planning process should calculate the suggested effective date, you also specify a use-up item.
Oracle MRP recommends a suggested effective date based on the use-up date of the use-up item. For example, you may want to change how you build an assembly. You manufacture a board, that has Chip A as a component:. You define an ECO with the Board assembly as the revised item. You specify Chip A as a revised component with a usage quantity of 0, and Chip B as a revised component with a usage quantity of 1.
You'd like to use up the Chip A's you have in stock before beginning to use the Chip B's. Note: While Oracle MRP calculates the use-up date as the basis for suggesting an effective date for the ECO, the planning process uses the current effective date instead of the suggested effective date when generating component requirements.
The only case where Oracle MRP considers the suggested effective date of the ECO when generating component demand is when the use-up item is the assembly in our example, the Board assembly instead of one of the components. In addition to engineering change orders, you can also make manual modifications to a bill directly, using the Bill of Material window.
Oracle MRP plans for component items as of their effective date for a given revision. The planning process creates planned orders that incorporate all bill of material changes that are effective as of the start date of the planned order. How much output can you get from a particular machine? Where can you cut costs associated with materials and labor? Is your staff working unnecessary overtime hours? Look for a solution that can automatically track your data and give you real-time insights into the operation.
You should have the ability to create custom reports that will answer specific day-to-day and big picture questions.
Manufacturing resource planning MRP is a complicated category. But the six tools listed in this guide should accommodate the needs of the vast majority of manufacturing companies. The best option for you just depends on what you prioritize the most. JobBOSS has the best features for shop control management. We recommend Fishbowl for MRP process automation. Odoo has a full suite of MRP solutions for manufacturing companies. Use Prodsmart for advanced data-driven insights.
If you want software that specializes in inventory management, stick with Brahmin Solutions. Most of these tools offer free trials and free demos. So you can always try them out for free before making a final buying decision. Our content is reader-supported, which means that if you click on some of our links that we may earn a commission.
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