Creating competitive advantage with demand-driven MRP

Posted by Jonathan Davies on 26 Jul

production-management

Demand-driven material requirements planning (MRP) is revolutionising supply chain management for the companies who are exploiting its benefits. It is a model which helps increase the competitive advantage for companies in the manufacturing sector by managing both the production and the time it takes items to reach the customer. Five recognised components of MRP are; Buffer Profiles and Level Determination; Dynamic Adjustments; Demand-Driven Planning; Execution and DDMRP Benefits. Demand-driven MRP enables the efficiency level of supply chain management processes to be increased and have a positive effect on competitive advantage

Simplify forecasting activities

To forecast accurately it should be based on data, so the more manufacturers are basing decisions on facts, the better it is for the supply chain and purchasing decisions. The execution visibility and lead-time compression provided by demand-driven MRP can be vital to cutting down on the number of forecasts which are needed in operational strategy, increasing efficiency in the process.

Minimise inventory

You could work with just limited inventory, simplify production to delivery process and decrease overheads; all thanks to a demand-driven MRP that bases inventory consumption on sales demand. Simple to complex bills of materials and production processes can be managed more efficiently with MRP. And all the while, this doesn't have to have a negative impact on your customer service - as demand-driven MRP can help you to cut your delivery times and assist with managing customer expectations. 

Adapting to volatile markets

Demand-driven MRP makes lots of allowances for the volatility of the market, giving you the opportunity to be proactive and make adjustments. If a product is nearing the end of its cycle, demand-driven MRP offers you a model which allows you to deplete stock. Similarly, if you are ready to kick-start production of a new product, your inventory can be adjusted accordingly. It can also manage seasonal fluctuations in demand. 

Boost productivity 

Shortages are often the reason why many MRP strategies, including those which are based on lean models, end up failing. Demand-driven MRP gets right to the core of this problem. It ensures that a lack of parts and materials will not be able to disrupt production processes and reduce production output. It may also lead to the reduction of certain overheads - including expenses such as premium freight - thanks to the ability to eradicate the issue of shortages.

Put an end to 'workarounds' 

Demand-driven MRP can streamline the supply chain and warehousing elements of your operations. It can remove the need for spreadsheets and disparate databases. Without it, these workarounds require more time and leave the door open for inaccuracies and mistakes. With demand-driven MRP, you can find that these rudimentary procedures truly do become a thing of the past.

MRP can be purchased on its own or as part of an integrated ERP system. WinMan ERP Software can offer you all the benefits of demand-driven MRP plus the ability to manage other areas of the business. It is the ideal choice for companies who want to have a lean manufacturing environment. Contact us to find out more.

>> Learn more about WinMan ERP Software

Topics: Production Management, supply chain, Warehouse Management Systems, Management

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