What is Materials Resource Planning (MRP)?
Material Resource Planning (MRP)
A material resource planning system is used by manufacturing firms to provision material, machinery, and labor for the completion of manufacturing jobs. MRP relies on bill of material data, inventory, purchasing, and the master production schedule to calculate requirements for materials. MRP systems also make recommendations for purchasing additional materials.
What can Material Resource Planning (MRP) do for My Company?
You can lower your costs by ordering inventory on an as-needed basis instead of keeping surplus items stocked in your warehouse. This will directly improve your inventory turnover time, and reduce the risk of an inventory shortage.
A shortage that stops your assembly process can lead to employees being sent home or working on other tasks unrelated to the original plan. Using MRP you are able to solve this problem by automating planning production to ensure accuracy and effective use of your employees’ time.
Also, by automating the planning of your material requirements, you can consistently reach your customer due dates. Predicting your shortages and fixing them before it delays production on your customers’ orders will definitely increase your overall customer satisfaction.
Not to mention, there are also price break benefits associated with MRP when ordering based on an economic quantity. The more you order, the bigger the price break you’ll receive per item. With MRP you can determine the correct amount of items to order so that you can qualify for volume item discounts.
Key Benefits of Material Resource Planning (MRP):
- Reduce inventory amounts in storage with ordering items on an as-needed basis
- Gain better pricing from vendors by ordering economic quantities
- Eliminate production idle time through accurately planning production
- Improve customer satisfaction by predicting shortages before they occur
- Decrease the time needed to fulfill customer orders by combining production forecasts
- Save time by automating the creation of shop floor plans, work orders, and purchase orders
Key Features of Material Resource Planning (MRP)
MRP software is useful in making sure that equipment resources do not lay idle. It is also used to make sure that work does not stop while employees wait for machines to become available.
Preventive Maintenance Scheduling
It’s inevitable that machinery will need to be scheduled for regular maintenance. MRP software can help manage maintenance schedules so that repairs and maintenance do not interfere with the ability to meet production schedules.
Work Order Integration
One of the main outputs of an MRP system is the information necessary to create work orders. By taking into account the machine, materials, and labor availability, MRP provides the information to the work order application necessary to make sure that production employees receive work orders optimized to meet customer demand. Most manufacturing companies have multiple production jobs underway at any given point. Scheduling labor with precisely timed work orders is key to meeting individual orders and making sure the operation as a whole is running at maximum efficiency.
Lead Time Inputs
Successful manufacturing resource planning requires accurate information about lead times. MRP software provides the tools necessary to bring together data about lead times required for purchasing, production, and delivery.
Bill of Materials Integration
MRP is a truly collaborative software application. There is no such thing as a stand-alone MRP system. One of the most important points of integration is with the bill of materials application. Bill of materials software creates a list of the raw materials, parts, and sub-assemblies necessary to manufacture a product. Using information from the bill of materials, MRP software provides the necessary planning information for provisioning of items from inventory, purchasing, and machine scheduling.
Purchasing and Inventory Integration
Another key point of integration for MRP is with the purchase order module. In order for MRP to provide accurate scheduling information, data regarding the lead times necessary for provisioning items must be able to flow from the purchase order module. Similarly, information from the MRP module about production forecasts can be useful in planning bulk purchases to realize volume-based discounts. Before making sending information to purchasing modules, MRP software can be configured to check inventory availabilities to ensure existing stock is used first.
Material Resource Planning (MRP) often integrates with: