| Manufacturing Resource Planning (MRP II) | |
| 🏭 Integrated manufacturing planning & control | |
| Acronym | MRP II |
|---|---|
| Originated | 1980s |
| Originator | Oliver Wight |
| Predecessor | MRP (I) |
| Successor | ERP |
| Domain | Production planning & control |
| Key modules | 8 integrated subsystems |
Manufacturing Resource Planning (MRP II) is an integrated information system used by manufacturers to plan and manage all resources needed for production. Coined by Oliver Wight in the early 1980s, it expanded the scope of Material Requirements Planning (MRP) from materials-only to a company-wide system that coordinates sales and operations planning, master scheduling, capacity planning, shop floor execution, purchasing, and inventory management into a single, closed-loop feedback system.
MRP II is distinguished from its predecessor MRP (I) by incorporating financial planning, simulation capabilities ("what-if" analysis), and feedback loops from execution back to planning. It served as the direct conceptual ancestor of modern Enterprise Resource Planning (ERP) systems.
The evolution toward MRP II followed a clear progression:
MRP II functions as a top-down planning hierarchy with bottom-up feedback. Strategic business plans cascade into progressively more detailed operational plans, while execution data flows upward to validate and adjust those plans.
graph TB
BP["Business Plan
(Strategic)"] --> SOP["Sales & Operations
Planning (S&OP)"]
SOP --> MPS["Master Production
Schedule (MPS)"]
MPS --> MRP["Material Requirements
Planning (MRP)"]
MPS --> CRP["Capacity Requirements
Planning (CRP)"]
MRP --> PUR["Purchasing"]
MRP --> SFC["Shop Floor
Control"]
CRP --> SFC
SFC --> INV["Inventory
Management"]
PUR --> INV
SFC -.->|feedback| MPS
INV -.->|stock status| MRP
SFC -.->|actual vs plan| CRP
style BP fill:#cedff2,stroke:#333
style SOP fill:#d5e8f5,stroke:#333
style MPS fill:#d5e8f5,stroke:#333
style MRP fill:#d5f5d5,stroke:#333
style CRP fill:#d5f5d5,stroke:#333
style PUR fill:#fff3cd,stroke:#333
style SFC fill:#fff3cd,stroke:#333
style INV fill:#f5d5d5,stroke:#333
The system operates across three planning horizons:
| Horizon | Timeframe | Module | Unit of planning |
|---|---|---|---|
| Strategic | 1–5 years | S&OP | Product families, dollars |
| Tactical | 1–18 months | MPS, MRP, CRP | Individual SKUs, work orders |
| Operational | Hours–weeks | SFC, Purchasing | Operations, purchase orders |
Each level constrains the one below it: S&OP sets production rates that bound the MPS; the MPS drives both MRP (materials) and CRP (capacity); MRP generates action messages for Purchasing and Shop Floor Control.
MRP II comprises eight tightly integrated subsystems. Each module has its own detailed article:
Balances aggregate demand with production capacity at the product-family level. Sets the top-level production plan that constrains all downstream scheduling.
Disaggregates the production plan into a time-phased build schedule for individual end items. The "engine driver" of MRP II.
The structural backbone — defines every component, sub-assembly, and raw material needed to build each finished product, with quantities and relationships.
Explodes the MPS through the BOM to calculate time-phased material needs, netting against inventory and scheduled receipts.
Validates that planned production orders from MRP can be executed within available work centre capacity. Identifies overloads before they hit the shop floor.
Manages the execution of planned orders on the factory floor — dispatching, tracking, and reporting actual production against the plan.
Converts planned purchase orders from MRP into actual supplier orders, managing vendor selection, lead times, and procurement execution.
Maintains accurate records of all stock — raw materials, WIP, and finished goods — providing the data foundation for MRP netting calculations.
The most important innovation of MRP II over simple MRP is the closed-loop feedback mechanism. Rather than generating plans and assuming they will be executed perfectly, the system collects actual performance data from shop floor control and purchasing, then feeds it back to adjust plans at every level.
graph LR
PLAN["Plan
(MPS + MRP)"] --> EXEC["Execute
(SFC + Purchasing)"]
EXEC --> MEASURE["Measure
(Actual vs Plan)"]
MEASURE --> ADJUST["Adjust
(Replanning)"]
ADJUST --> PLAN
style PLAN fill:#d5e8f5,stroke:#333
style EXEC fill:#d5f5d5,stroke:#333
style MEASURE fill:#fff3cd,stroke:#333
style ADJUST fill:#f5d5d5,stroke:#333
This closed loop enables:
| Aspect | MRP I | MRP II |
|---|---|---|
| Scope | Materials only | All manufacturing resources (materials, capacity, labour, finance) |
| Capacity | Assumes infinite capacity | Explicit capacity planning |
| Feedback | Open-loop (plan only) | Closed-loop (plan → execute → measure → adjust) |
| Financial | None | Integrated financial planning & simulation |
| Simulation | None | "What-if" scenario analysis |
| Users | Inventory planners | All functions: planning, manufacturing, purchasing, finance, sales |
By the early 1990s, leading MRP II systems had expanded to include modules for human resources, quality management, distribution, project management, and more. In 1990, Gartner analyst Lee Wylie coined the term Enterprise Resource Planning (ERP) to describe this broader scope.
graph LR
MRP1["MRP I
(1970s)
Materials only"] --> CLMRP["Closed-Loop MRP
(Late 1970s)
+ Capacity feedback"]
CLMRP --> MRP2["MRP II
(1980s)
+ Finance, simulation"]
MRP2 --> ERP["ERP
(1990s)
+ HR, distribution, QM"]
ERP --> ERP2["ERP II
(2000s)
+ SCM, CRM, e-commerce"]
style MRP1 fill:#f5d5d5,stroke:#333
style CLMRP fill:#fff3cd,stroke:#333
style MRP2 fill:#d5f5d5,stroke:#333
style ERP fill:#d5e8f5,stroke:#333
style ERP2 fill:#cedff2,stroke:#333
ERP inherited MRP II's core principles — integrated database, closed-loop planning, and top-down planning hierarchy — but extended them enterprise-wide. Today, ERP vendors like SAP, Oracle, and Microsoft Dynamics still include the original MRP II modules as their manufacturing core.
Oliver Wight established a maturity model for MRP II implementations, ranging from Class A (excellent — system used company-wide with high data accuracy) to Class D (poor — system used only for data processing with no management involvement). Key criteria include: