CIMA E1 Syllabus E1. Operations management - MRP / ERP - Notes ^{13 / 21}

Material Requirement Planning(MRP)

It is a computerised system for planning the requirements for raw materials, work-in-progress and finished items.

It looks at 3 things:

1. What is needed?

2. How much is needed?

3. When is it needed?

Manufacturing resource planning (MRP II)

It goes further than MRP and also considers the requirements of the entire manufacturing process through production planning, quality checks, forecasting demand etc.

Optimised Production Technology

Optimised Production Technology is a computer based method for scheduling production that focuses on the known capacity constraints (bottlenecks) of the operation.

It can be used to:

1. Identify the capacity constraints in the system

2. Schedule production to these capacity constraints

3. Try to identify ways of overcoming the capacity constraint, so as to increase capacity

4. Having done that, identify the next capacity constraint and schedule production to this constraint

Enterprise resource planning (ERP)

ERP is the next evolution of a MRP system. 

ERP combines information from different parts of operations and support functions into one single system.