Material requirement planning (MRP) is a manufacturing management system assisting manufacturers in dealing with production planning, scheduling and inventory control. MRP is also interchangeably used to refer to manufacturing resource planning, which is actually MRP II. Manufacturers in various industries have used the MRP system for nearly 30 years now.
Computerisation and data technology in the digital age has elevated MRP into a vital production tool offering several benefits to the manufacturer. Here are the top 8 benefits of MRP systems.
Inventory management is crucial to realising manufacturing efficiency. MRP systems work with data from the production schedule to determine the exact level and cost of inventory required to meet the demand. MRP systems maintain an optimum inventory level of both parts and materials, reducing the inventory carrying costs. In the process, this cuts down and optimises the inventory costs within a production period.
Streamlining the production process is also heavily dependent on knowing what is available, what to buy and when to buy. Purchase planning requires a smart system to track the production steps and identify any needed purchases while counter-checking with the production schedule and expected material deliveries. Procurement managers configure MRPs to contact suppliers automatically when there is a need for a purchase.
MRP systems detect bottlenecks in the production line caused by scarcity or a reduction of material. When this happens, the system can reroute production or recommend a reroute to the production of a different product where materials are available. MRPs can also focus efforts in a particular production stage at the expense of another stage deficient of raw materials and parts. MRPs help manufacturers plan their production lines even when there are material availability constraints.
Work scheduling manages active production time, predicting the expected yield and the adherence to the production schedule. MRPs paint the larger picture of the production process using the available inventory. Managers' can use this information to control hourly operations, equipment and labour tasks, and even accurately predict labour time and operational costs.
Raw materials are the lifeblood of any manufacturing process. Having control and ready information about the raw materials' availability and expected yield also gives the manufacturer an idea of other resources to engage in the process. Efficiency here is key. Information from the MRP system tells the manufacturer what equipment is required at what time and when extra labour is needed, as well as whether to hire or buy operational assets.
Data management and documentation
Manufacturing involves the generation, analysis and presentation of a tremendous amount of data. MRP systems assist manufacturers in handling this information. MRPs process and document purchase data, inventory data, deliveries and cash flow data into receipts, invoices, lists, reports, and other easily structured presentations.
The system takes into account the quantity and cost of materials needed - including the cost of shipping, storage, and carrying - to come up with the most economically viable purchase to satisfy demand. MRP systems economically optimise purchases with high precision, saving the manufacturer the cost of unnecessary purchases.
MRP systems are fully automated and require little human intervention. This saves a great deal of labour time otherwise used to do inventory, purchases, and production management. The level of accuracy in these systems is far beyond any error-prone human method. It also manages and stores production data, which eliminates the need for entire departments.
Efficient manufacturing requires careful planning to ensure you have the right resources on hand throughout the entire production process. To find out more about WinMan resource management system contact us today.