In this modern world, every manufacturer is looking for ways to reduce cost and optimize the business operations to the fullest. When we talk about manufacturing industry, production and resource optimization are crucial processes that cover all the bases of an organization’s profit.
MRP or Material Requirement Planning software was developed in the 1960s to help businesses streamline and address the fluctuations in demand and supply. It was embedded with excellent features and ensured a favorable production plan for multi-level processes.
However, the MRP software that was once considered a breakthrough has now become quite an old hat today. Presently, businesses prefer to invest in a comprehensive ERP, Enterprise Resource Planning software that comprises of every basic business module – production (MRP, MPS), sales, purchase, inventory, administration, finance, accounting and more. A single software manages every operation and this indeed has made it popular around the globe. In the age when manufacturing industries are facing a global competition, a full-fledged ERP software is a key to efficient business operations. It includes top-notch planning features that make the entire process simple and stress-free.
Well, what is the need for planning in an organization? How can it benefit the company’s bottom-line? How does this process work? What is the role of Material Requirement Planning in an ERP software? Many individuals are still trying to dig the answers to these questions. Let’s dive into what is the importance of planning in this sector.
#Why is material requirement planning required in manufacturing?
Planning is paramount in any business. Until you don’t have a proper roadmap, execution becomes unmanageable. For all the manufacturers, the foremost aim is to manage, plan and schedule the production process to avoid excess inventory or stock-out. Excess inventory blocks your capital, it takes up your floor, increases storage costs and encourages wastage. On the other hand, stock-outs may lead to unfulfilled orders and unsatisfied customers.
The primary purpose of material requirement planning is to ensure accurate availability of components for production. It determines the number of finished goods to be produced and by what date it will be shipped to the customers. The number of end-products planned will depend on the materials procured.
#How does material requirement planning work?
Material requirement planning is a crucial part of the industries where multiple parts are used to create the finished goods. Replenishment depends on the future demand information. Floor managers and warehouse managers are always updated about which set of goods has to be procured or shipped.
MRP manages the entire manufacturing system while handling production planning, warehouse, and scheduling. Basically, it assists production managers and warehouse managers to plan for capacity and allocate production time. It ensures well-timed availability of components at all the levels.
MRP allows manufacturers to future-proof their business by planning for anticipated demand in advance – just to make sure that materials needed for production are available in the inventory. MRP suggests materials to be purchased and production of batches to meet imminent sales order demand.
#How can material requirement planning add more to business value?
Material requirement planning is responsible for balancing the production demand and supply. It is a single planner that handles both purchasing and production supply scheduling that ensures different batch sizes and minimum stock balance.
- MRP functionality enables global iterative plans, simulates supply scenario and reduces planning cycle time
- It compares production time with lead time to ensure easy availability
- Improves shop floor performance, optimizes every resource
- Ensures that finished goods are delivered to the customer on time
- With decreased inventory levels and utmost utilization of resources, MRP facilitates productivity
Presently, ERP software are embedded with an inbuilt material requirement planning tool that offers every basic functionality regarding production planning, scheduling and inventory control system across multiple organizations. Instead of choosing different tools for supply chain planning, production, material requirement planning, sales, accounts, finance, inventory, quality control etc., it is always wiser to invest in a single quality solution that addresses every fundamental need of a manufacturing company.
OptiProERP is an all-inclusive software that manages critical levels of the business while ensuring streamlined work culture. This triggers employee efficiency, reduces lead time and expedites profitability. Here are a few ways how OptiProERP with SAP Business One can let you manage the business efficiently –
- Material requirement planning in OptiProERP lets you accelerate product introductions and deliver more intelligent order fulfillment
- Plan finished goods, manage lead time, eliminate last-minute scheduling
- Accomplish warehouse operations with a mobile-friendly warehouse management system
- Track resource utilization while managing orders
The need of Material requirement planning is understated. It is loaded with sophisticated planning capabilities, namely global planning, an individual company with planning engine, an individual company without planning engine. Irrespective of the location of the warehouse, shop floor, and packaging area, manufacturers can manage, view and streamline the core activities that are responsible for production. Three principle software of MRP software are –
- To ensure availability of materials
- Drive down waste and promote lean manufacturing
- Automate the planning and scheduling process
Manufacturing organizations, whether small-scale or large-scale, nowadays are using a nimble Enterprise Resource Planning software that has a range of inbuilt functionalities, modules, and add-ons which can be customized as per your specific requirements. OptiProERP with SAP Business One ensures real-time visibility of data, high-grade performance, user-friendly UI and everything that your business requires. With years of experience, we empower our customers to achieve their milestone without any glitches. For further inquiry, you can send an email to email@example.com.