Manufacturing Resource Planning (MRP II): A Practical Guide for Small Producers

Aleksander Nowak · 2026-02-20 · Industry Guides

MRP II explained for small manufacturers. What it means, how it differs from MRP I, when you need it, and when simpler approaches work fine.

Manufacturing Resource Planning (MRP II): A Practical Guide for Small Producers

You're already doing manufacturing resource planning. You just might not call it that.

When you check if you have enough ingredients before starting a batch, that's material planning. When you figure out whether your equipment and staff can handle a rush order, that's capacity planning. When you schedule production around delivery dates, that's production scheduling.

MRP II is simply the formal name for connecting all these decisions into one system. This guide explains what manufacturing resource planning actually means, how it differs from basic material planning, and when it makes sense for small batch producers.

What Is Manufacturing Resource Planning?

Manufacturing Resource Planning (MRP II) is a system for coordinating everything needed to make products: materials, equipment, labor, and time. It answers not just "what do we need?" but "can we actually make it, and when?"

The name includes "II" because it evolved from an earlier system called Material Requirements Planning (MRP I or just MRP). The distinction matters:

MRP I asks: What materials do I need to buy, and when?

MRP II asks: What materials do I need, plus do I have enough machine capacity, are workers available, and can I realistically deliver on time?

MRP II connects the dots between your recipes, your inventory, your equipment, and your schedule. Instead of managing each piece separately, everything flows together.

A Brief History

Understanding where these systems came from helps explain why they work the way they do:

1960s-70s: Spreadsheets and guesswork. Manufacturers tracked materials on paper or early computers. Planning meant experienced managers making educated guesses.

1970s: MRP I emerges. Computer systems could finally calculate material needs based on orders and recipes. Revolutionary for its time, but focused only on materials.

1980s: MRP II develops. Manufacturers realized materials alone weren't enough. They added capacity planning, shop floor tracking, and financial integration. The system could now answer "can we make it?" not just "what do we need?"

1990s-present: ERP expands further. Enterprise Resource Planning added sales, HR, accounting, and other business functions. MRP II became one module within larger systems.

For small manufacturers today, the question isn't whether to use these concepts — you already do. The question is how much formality and automation you need.

Core Components

These systems typically include interconnected pieces:

Master Production Schedule

What are you planning to make, and when? The master schedule defines your production targets — not in vague terms, but specific quantities with specific dates.

Example: A skincare producer might plan: - Week 1: 200 units face cream, 150 units body lotion - Week 2: 300 units face cream, 100 units serum - Week 3: 250 units face cream, 200 units body lotion

This schedule drives everything else. Change the schedule, and material needs, capacity requirements, and purchasing all shift accordingly.

Bill of Materials (Recipes)

What goes into each product? BOMs define the ingredients and quantities needed. For batch producers, this is your recipe or formula.

Example: Face cream (per 100 units): - 2kg shea butter - 1.5kg coconut oil - 500g beeswax - 200ml fragrance oil - 100 jars with lids - 100 labels

The system multiplies these requirements by your production schedule to calculate total material needs.

Inventory Status

What do you have on hand? Current stock levels, incoming deliveries, and reserved materials all factor into planning. If you need 6kg of shea butter for next week but only have 4kg, the system flags the shortage.

Capacity Planning

Can your equipment and people handle the schedule? This is where MRP II goes beyond basic material planning.

Example: Your production schedule calls for 500 units next week. But your mixing equipment can only process 100 units per day, and you have one trained operator working 5 days. Maximum capacity: 500 units. You're at the limit — any rush orders would require overtime or extended hours.

Capacity planning reveals constraints before they become crises.

Shop Floor Control

What's actually happening in production? Tracking work-in-progress, completed batches, and actual vs. planned output helps you adjust schedules based on reality, not assumptions.

Purchasing Integration

When should you order materials? Based on your production schedule, current inventory, and supplier lead times, the system calculates when to place orders so materials arrive just in time.

MRP II in Action: A Practical Example

Let's walk through how these components work together for a small cosmetics producer.

Situation: A retailer orders 500 jars of face cream for delivery in 3 weeks.

Step 1: Check the Master Schedule Current plan shows 200 units/week of face cream. Adding 500 units means either increasing one week's production or spreading across multiple weeks.

Decision: Produce 300 extra in week 2, 200 extra in week 3.

Step 2: Calculate Material Requirements Per 100 units: 2kg shea butter, 1.5kg coconut oil, etc. For 500 extra units: 10kg shea butter, 7.5kg coconut oil, etc.

Step 3: Check Current Inventory - Shea butter: 8kg on hand, 5kg arriving next week = 13kg total. Need 10kg. ✓ - Coconut oil: 3kg on hand, nothing ordered. Need 7.5kg. ✗ Shortage! - Jars: 200 in stock. Need 500. ✗ Shortage!

Step 4: Check Capacity Week 2 already scheduled at 80% capacity. Adding 300 units pushes to 140%.

Options: Overtime, reschedule other products, or negotiate later delivery.

Step 5: Generate Actions - Order 5kg coconut oil immediately (lead time: 5 days) - Order 300 jars immediately (lead time: 7 days) - Schedule overtime for week 2, or move 100 units to week 3

Without connecting these pieces, you might accept the order, then discover mid-production that you're short on materials or can't physically make enough in time.

MRP I vs MRP II vs ERP

These terms get confused. Here's how they relate:

When MRP I is enough: - Single product or very simple product line - No capacity constraints (equipment handles any volume) - You're the only worker (no labor scheduling needed) - Predictable, steady demand

When you need MRP II concepts: - Multiple products competing for same equipment - Capacity limits affect what you can promise - Multiple workers with different skills - Variable demand requiring schedule adjustments

When full ERP makes sense: - Revenue over $5M+ with complex operations - Multiple departments needing integrated data - Regulatory requirements for comprehensive tracking - Dedicated IT staff for implementation and maintenance

When Full Planning Systems Are Overkill

Not every producer needs formal resource planning systems. Signs that simpler approaches work fine:

Your bottleneck is always the same. If one constraint dominates (you can only make 50 batches/week regardless of demand), elaborate capacity planning adds little value.

Demand is predictable. Steady orders mean steady production. Complex scheduling tools help most when things change frequently.

You make one thing. Single-product businesses have simpler planning needs than those juggling multiple product lines.

Lead times are short. If you can get any material within days, sophisticated purchasing calculations matter less.

You're the whole team. Solo operators know their own capacity intuitively. Formal systems help more when coordinating multiple people.

Even in these cases, the concepts behind MRP II — connecting materials, capacity, and schedules — remain valuable. You just might implement them with spreadsheets rather than dedicated software.

Common Misconceptions

"MRP II requires expensive enterprise software." The concepts can be implemented at any scale. What matters is connecting the information, not the tool you use. Lightweight manufacturing software applies MRP II principles without enterprise complexity.

"MRP II is only for big factories." The system was developed for large manufacturers, but the underlying logic — coordinating materials with capacity — applies at any scale. A 3-person cosmetics company benefits from knowing whether they can actually fulfill an order before accepting it.

"We're too small for formal planning." You're already planning. The question is whether your current approach catches problems early enough. If you've ever accepted an order you couldn't fulfill, or discovered a material shortage mid-batch, better planning would help.

How Krafte Approaches This

Krafte applies MRP II principles in a format designed for small batch producers.

Connected planning: Your recipes, inventory, and orders link together. When you create a production order, the system shows whether you have sufficient materials.

Capacity visibility: See your production workload and identify scheduling conflicts before they become problems.

Automatic calculations: Material requirements calculate from your recipes. No manual spreadsheet formulas to maintain.

Purchasing integration: Track what's on order from suppliers. Know when incoming materials will arrive relative to when you need them.

Practical scale: You get the coordination benefits of MRP II thinking without enterprise complexity. Start in days, not months.

The goal isn't to implement formal MRP II methodology. It's to connect the information you need so production runs smoothly.

Frequently Asked Questions

What does MRP II stand for?

Manufacturing Resource Planning. The "II" distinguishes it from the earlier Material Requirements Planning (MRP I or just MRP). MRP II adds capacity planning, scheduling, and other resources beyond just materials.

What's the difference between MRP and MRP II?

MRP focuses only on materials: what to buy and when. MRP II expands to include all production resources: equipment capacity, labor availability, and shop floor scheduling. MRP II answers "can we make it?" while MRP only answers "what do we need?"

Is MRP II the same as ERP?

No. MRP II focuses on manufacturing operations. ERP (Enterprise Resource Planning) encompasses the entire business: manufacturing plus sales, finance, HR, and other functions. MRP II often exists as one module within larger ERP systems.

Do small manufacturers need MRP II?

The formal system? Often not. The concepts? Usually yes. If you coordinate materials, equipment, and schedules — even informally — you're applying MRP II thinking. Software helps when manual coordination becomes error-prone or time-consuming.

How long does MRP II implementation take?

Enterprise MRP II systems can take months or years to implement. Lightweight manufacturing software applying the same principles can be operational in days or weeks. The difference is scope and complexity, not the underlying concepts.

What industries use MRP II?

Any industry that manufactures products from components or ingredients: food production, cosmetics, chemicals, electronics, furniture, and countless others. The specific calculations vary, but the logic of coordinating materials with capacity applies broadly.

Tags: Manufacturing