Increasing Functional Specificity over Increasingly Commoditized Hardware - Guide to Cloud Computing for Business and Technology Managers - page 21

Capacity Requirement Planning module, which could be used in
developing capacity plans to produce the master production schedule.
Manpower planning and support for human resources management
were incorporated into MRP. Distribution management capabilities
were added. The enhanced MRP and its many modules provided data
useful in the financial planning of manufacturing operations; thus,
financial planning capabilities were added. Business needs, primarily
for operational efficiency and to a lesser extent for greater effective-
ness, and advancements in computer processing and storage technol-
ogy brought about MRP and influenced its evolution. What started as
an efficiency-oriented tool for production and inventory management
was becoming increasingly a cross-functional system.
1.5.1.2 Closed-Loop Materials Requirement Planning
A very important capability to evolve in MRP systems was the ability to
close the loop (control loop). This was largely because of the development
of real-time (closed-loop) MRP systems to replace regenerative MRP sys-
tems in response to changing business needs and improved computer
technology—time sharing was replacing batch processing as the dominant
computer processing mode. With time-sharing mainframe systems, the
MRP system could run 24/7 and update continuously. Use of the corporate
mainframe that performed other important computing task for the orga-
nization was not practical for some companies, because MRP consumed
too many system resources; subsequently, some companies opted to use
mainframes (now growing smaller and cheaper but increasing in process-
ing speed and storage capability) or minicomputers (could do more, faster
than old mainframes) that could be dedicated to MRP. MRP could now
respond (update relevant records) to timely data fed into the system and
produced by the system. This closed the control loop with timely feed-
back for decision making by incorporating current data from the factory
floor, warehouse, vendors, transportation companies, and other internal
and external sources, thus giving the MRP system the capability to pro-
vide current (almost real-time) information for better planning and control.
These closed-loop systems better reflected the realities of the production
floor, logistics, inventory, and more. It was this transformation of MRP
into a planning and control tool for manufacturing by closing the loop,
along with all the additional modules, that did more than plan materials—
they planned and controlled various manufacturer resources—that led to
MRP II. Here too, improved computer technology and evolving business
needs for more accurate and timely information to support decision mak-
ing and greater organizational effectiveness contributed to the evolution
from MRP to MRP II.