Essential Software Solutions

Navigating the Dynamics of APS and MRP in Manufacturing

14 Feb 2024 12:43 PM By Kaan

In the complex world of manufacturing, two planning systems significantly impact operational efficiency and production processes: Advanced Planning and Scheduling (APS) and Material Requirements Planning (MRP). These systems are intended to optimize resource utilization, minimize costs, and improve overall productivity. However, their approach and focus differ, addressing distinct different aspects of the manufacturing cycle.


Material Requirements Planning (MRP) calculates the net supply and demand for materials only. MRP has been the cornerstone of most legacy manufacturing-centric ERP systems. ERP was born from MRP, as it were. It considers existing inventory levels compared to a demand forecast and suggests planned orders, to procure, or make materials needed for production, in the time they are needed, or ‘Just in time’. Master production scheduling (MPS) and rough-cut capacity planning tools were later developed to give MRP more help with its limitations. It was called MRPII. However, MRP and MRP II will not provide insight if the proposed schedule is achievable whereas APS systems will, as they also consider shortages of capacity. This is where APS can be a better tool with its constraint management and more accurate planning.


Everyone desires to improve On-Time Delivery (OTD) by creating an achievable Material and Production Plan and the tools to monitor and adjust the plan, as needed. APS provides increased visibility of all resources including labor, machine time, subcontractors, tooling, fixtures, (almost everything), and not just materials. After all, if the material is received at your dock and the machine or shop employee is already busy, the material is placed into stock (waste).

Advanced Planning and Scheduling (APS) fixes many of the limitations of MRP and MRPII systems. It does not replace MRP, rather it adds additional planning parameters such as people, machinery, capacity, and routings. MRP’s primary focus is on optimizing inventory, whereas APS is on optimizing production throughput. APS is more complex and provides more advanced planning capabilities, such as finite scheduling, and forward/backward scheduling. Most ERPs only allow for infinite scheduling.

Let’s now compare APS and MRP in more detail

Scope

Advanced Planning and Scheduling involves a comprehensive perspective that takes into account all ‘resources’ and factors that play a role in the production process. By utilizing APS, businesses can better manage their production activities, optimize resource allocation, and enhance their overall operational efficiency. MRP uses safety stock to hedge against variability in demand.

Material Requirements Planning is a legacy, trusted element in supply chain management of materials and inventory to ensure smooth and efficient operations. It involves identifying the necessary raw materials, determining the right quantity and is offset by the vendor lead times for procurement, and monitoring inventory levels to maintain optimal stock levels.

Flexibility

APS is designed to provide flexibility and adaptability, enabling real-time changes and dynamic decision-making toward on-time delivery, overhead control, and increasing profit. It empowers businesses to adjust to unexpected challenges and opportunities proactively, optimizing resources and improving their overall performance.

MRP can be more rigid and inflexible by itself. It was designed for the predictable demand of manufacturing to a forecast, which can limit adaptability to changes in actual demand, supply, or production. The APICS (comical) definition of a forecast is ‘it is never correct’ – the more complex the product, the more this definition rings true.

Flexibility

Advanced Planning and Scheduling is more complex and requires more discipline due to its consideration of so many factors.

MRP is more straightforward, primarily focusing on material planning to a forecast.

In the dynamic landscape of manufacturing, the choice between Advanced Planning and Scheduling (APS) and Material Requirements Planning (MRP) depends on the specific needs and complexities of the production environment. While MRP remains a fundamental tool for managing materials and ensuring the optimum inventory mix, APS offers a more holistic approach, that considers every possibility involved in the production process.

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