Materials Requirement Planning (MRP) systems are a beneficial and scalable option for businesses, who have manufacturing processes and supply chains - as it can help gain competitive advantage and minimise inefficiencies in resource management.
But it's important to understand the benefits of this specific type of planning software if you want to improve efficiency, reduce waste and boost profit margins. Here are five reasons that MRP software will benefit your business:
Maximise resources with MRP systems
Knowing how suppliers communicate, delivery lead times, production times, sales demand and general business data will make it much easier for you to develop more efficient processes to maximise resources. For example, if you manufacture seasonal items, you can assess where the spare production capacity is, allowing you to spread the workload more evenly; or HR staff can use the MRP system to earmark seasonal hiring period to minimise the issues that may occur with late or rushed recruitment drives.
MRP can actively help you with capacity planning so jobs can be scheduled at a time where both the required materials and human resources are available. Without such a planning program to oversee resources, you could be taken by surprise with a sudden need to purchase more materials to fulfil a job or the need to hire more people.
Forecast accurately with MRP software
Trend analysis with MRP software can provide you with monetary rewards, saves time and improve efficiencies. Detailed data can be used to predict capacity and customer demand such as which products are seasonal, the colour that sells the best and which product lines are the most popular etc. MRP software can also be used to identify pricing trends such as price fluctuations from suppliers. By combining customer trends and supplier data it can help you plan ahead to buy in advance and save money.
Manage inventory cost-effectively
A good MRP system will minimise or eliminate the likelihood items lying around the warehouse unused and make sure required components for production do not run out. Inventory levels can be easily checked and re-ordered before it becomes out of stock. This improves the efficiency, prevent unnecessary downtime due to parts, costly delays and avoids excessive stock levels.
Identify purchasing trends
An MRP system means that you can also keep an eye on the stock that is not being sold or used cost-effectively, use this information to determine new processes. You may also find that products are removed from your production line altogether as demand falls dramatically - saving you unnecessary spend on storage, components costs, and staff for that particular production.
Integrate with other ERP software for comprehensive resources management
One of the main disadvantages of MRP software is that it is heavily reliant on accurate data and this may not be the case if there are multiple systems in place. Having MRP as part of an integrated ERP solution and consolidating existing systems will improve data accuracy – making it an even more powerful tool. You will be able to manage your supply chain while keeping your production on schedule, raise sales orders while checking whether there is sufficient stock or demand planning while strategizing for growth.
ERP technology can also provide other functionalities such as route planning for delivery drivers, access for remote workers and ensure cross-business board-level report delivery.
Find out more about the advantages of an MRP system or a complete ERP business solution by contacting WinMan today.