Basics of MRP1

Introduction

MRP1 is the predecessor of enterprise resource planning application. ERP has become the talk of the day not only with regards to management and information systems but also for the whole business. When there is much hype around it is also equally important to trace the origin of ERP and its Predecessors.MRP1 the acronym of material resource planning was the first business application that set foot in the ERP family. The credit of computerizing the business processes solely goes to MRPI.MRP1 functioned with the objective of increasing the business profit by enriching the business. It is important to know the problems faced by companies before understanding how Material resource planning solved them. MRP software was a boon to companies facing troubles in production. MRP planning facilitated the functions of the software.

Predicting the demands in advance

Companies were able to turn raw material into finished products easily even without any technical backups. Companies could not engage in mass production schedule for fear of decline in the customers demand. Hence they suffered from some limitations like not being able to predict the demand properly. If they produced more and the demand was loss the surplus amounted to loss. On the other hand if they engage in lower production scale when the demand is really high it will affect their business and potential loss. There seemed to be no end due to these discrepancies.

Purchasing Raw materials

The question of allocating raw materials and scheduling their purchase turned out to be another headache. If companies were unable to predict sales it would neither be logical to expect them to decide the exact quantity of raw materials required for production. If they bought excess it was a mere waste .on the other hand deficit purchase affected sales.

MRP1

Dr Joseph Orlicky invented MRP1 in the year 1960.This system comprised a computer that helped to compute the exact quantum of raw materials and sales. This point proved to be the start for integrating IT with manufacturing Systems. Ever since they have become inseparable after advancements in the name of MRPII and ERP while the latest one being ERPII.MRP planning is the crux of MRP software.

Nature of functioning

MRP1 works like a simple mathematical formula. If all the inputs are fed in one end and the calculations are applied the output is received at the other end. Input here reefers to the quantity of raw materials and expected demand along with minute details of resources like Period, optimum production capacities and the current level of stocks. This will be processed by the system .It will then let the user to know the steps that should be taken for achieving the said production limits and there ends the troubles. MRP software solved all the problems related to production. MRP planning was helpful to a great extent in this aspect.

Applications

MRP's application in the working environment is wide in nature. It just doesn't limit to production. It can calculate each and everything related to production. The functioning of MRP1 is quiet diverse and it can be put to use in many industries.

Advantages and Disadvantages of ERP
ERP History in Depth
Exploring ERP fundamentals
ERP’S impact on its stakeholders
What is MRPII?
Knowing about ERP Software Solution

Bookmark this Page Email this to your friend Add this page to del.icio.us