Doing contemporary business in the environment characterised by increased competition and liberalisation of trade markets, is not stable and it is in constant need for improvements in order to stay profitable and competitive. The development of information technology has enabled companies to keep up with the competition by developing their own integrated system for effective planning of manufacturers resources called Manufacturing Resource Planning or MRP.

Simply put, MRP is a time phased system for controlling the production and inventory function from the purchase of raw materials to the delivery of finished goods. The primary goal of MRP is optimising the inventory and reducing cost while improving quality.

Inventory status tells us about each item record, showing its status on a period by period basis. It also keeps track about suppliers, lead time, lot size etc. Nevertheless, while MRP offers information about the right time when to order and the quantity of how much to order, enabling the formation of new orders and their rescheduling, it does not offer deeper connection with other important functional areas of a company such as finance, marketing, engineering and human resources.

This fact has initiated the need for much broader system which will include other functional areas of the company. The idea behind this kind of integrated system is mutual benefit of one department knowing what the other one is doing, so that, for example, if finance managers know which goods are going to be purchased and when they are going to be delivered, they can calculate companies finances more accurately. Also, if a Human Resources department knows about manufacturing resource plans, they can plan their need for hiring new employees or redundancies.

Therefore, we can define Manufacturing Resource Planning as an integration business process strategy enforced by using software linked to central database which stores all the information about manufacture resources planning, available to every functional area in the company which can benefit from such information by planning their own resources in alignment.

When it comes to companies which look for this kind of integrated system, they are usually in need for a total company management concept for using its human and material resources more effectively and MRP is, in fact, the best solution for them. MRP is fully automated. It means that software calculates and recalculates the requirements of raw materials based on order forecasts, making changes for possible issues, before they arise. It is easy to see the advantage of such system in comparison with obsolete and traditional management systems.

A company in need for MRP can observe its advantages in the following elements of MRP:

Feedback as MRP systems uses a feedback from the production floor and includes both progress and delay. It uses this information to update the schedule and make the next round run more smoothly.

Schedule of resources element is the very core of MRP because it enables the formation of precise data which helps other functional areas in the company to grasp and control the manufacturing process. – Planning for human resources capacity and accurate data (it is of crucial importance that entered data is accurate because inaccurate data can cause miscalculations and many problems to the business).

Companies which wish to improve the production process and increase the revenue, no matter whether they are big, with a lot of assembly lines, or small, offering complex products, can profit much from implementing MRP. Manufacturing Resources Planning is a perfect solution for the companies which are in constant search for reducing the inventory levels and costs, improvement of customer satisfaction by avoiding late and flawed orders and improvement in production process by meeting modern business standards and demands.