Why MRP Software is Important?

Making sure you’ve everything you need available — whether or not it’s raw materials, production capability or sufficient labour — is key to working an efficient, lean and versatile manufacturing enterprise.

Managing the supply chain and the manufacturing process is a fundamental requirement of a successful manufacturer. After all, getting the numbers wrong can lead you both to being unable to provide your customers or to wasting money on unwanted stock and the cost of storing or disposing of it.

Material requirements planning (MRP) takes on this important logistical function and helps guarantee you’ll be able to meet ongoing demand without spending money on unnecessary inventory, hitting manufacturing bottlenecks or discovering you can’t source the needed materials.

What is material requirements planning?

MRP is a system that enables companies — primarily manufacturers, but not exclusively so — to schedule manufacturing necessities, control inventory and plan deliveries of raw materials. It makes use of a manufacturing plan for the completed goods to schedule your necessities for the materials and parts you need.

As technology has evolved over the previous half a century, so has the MRP offering. Today’s MRP software can play an important role in making certain you’ve the proper quantity of materials on hand and are capable of meet the manufacturing needs of your customers.

It permits you to keep up with demand without having to spend hours manually understanding what is needed in order to fulfil your commitments.

How does manufacturing MRP work?

As sales ebb and movement over the long term, so your demand for materials and components varies. By analysing your manufacturing schedule, MRP software can calculate your upcoming requirements. Rather than relying on educated guesswork, it displays your inventory in actual time and orders new components and materials when required.

It takes your manufacturing plan and schedule and works backwards from there, presenting you with an accurate analysis of what you need, how much of it you need, and whenever you need it.

In easy terms, if an order is received, Material Resource Planning software will:

• Identify present inventory
• Raise buy orders for something not already in inventory
• Analyze raw material availability timescales
• Work out a manufacturing start date based on the requested delivery date

What data goes into an MRP system?

Odoo MRP software can observe dozens of variables. Ultimately, the more data that is fed into the system, the more advanced and accurate its planning shall be.

The data it analyses includes:

• What products are on order, and the portions
• Deadlines
• Bills of materials (BoM) — the raw materials needed for every product
• Purchase orders
• Sales orders
• Details of existing inventory levels
• The shelf lifetime of the existing inventory
• Materials on order from suppliers
• Any recognized shortages of available materials
• Labour availability
• Forecasts for demand and supply, based on past data
• Existing demand in the market

As such, a smooth-running MRP system advantages from data being uploaded by colleagues throughout the enterprise, including in the finance department, manufacturing managers, in the stockroom, in the distribution team and HR.

The benefits of MRP methods

One of the greatest benefits of an MRP system is larger management over your inventory. It gives you an correct and quick reading of what you’ve, what you want and how a lot it will value you to satisfy your customers’ demands.

Linked to that, it identifies what to purchase and when by cross-referencing present inventory ranges with order necessities. Suppliers could be contacted robotically when parts or uncooked supplies are required.

MRP software can seek for the best possibility for ordering materials and parts, even factoring in points similar to delivery prices. In different phrases, it can store around for the finest deal.

By monitoring issues in the wider market — similar to shortage of materials — MRP software can spot potential obstacles in advance, serving to stop potential manufacturing bottlenecks.

Meanwhile, the value of labour for a specific project could be more accurately predicted. As well as enabling project managers to deal with logistical issues similar to extra time necessities in advance, it provides another layer of data when it involves costing a project.

MRP software can present you with all kinds of detailed data, together with purchase data, timetables, receipts and invoices.

In abstract, a good MRP system offers you management over your inventory, cuts your costs (and, ultimately, makes you more aggressive in your potential customers), helps plan your manufacturing schedule and delivers higher customer service, with less danger of failing to satisfy your deadlines.

Although the guide inputting of accurate data is necessary, the day-to-day automation of the process makes the complete system extraordinarily time-efficient, too.

Things to watch out for

The data produced by MRP software is more accurate, faster and more updated than data produced by easy spreadsheets or a pen and paper. However, the software can generate data based only on what has been enter.

In the same way that including wrong figures to a spreadsheet results in an inaccurate conclusion, the high quality of data that is fed into an MRP system is equally vital. Inputting errors and out-of-date data won’t provide you with an correct result.

If you begin to manufacture a new product, or if a product’s BoM modifications, ensure the system is advised this. Meanwhile, in order to maintain inventory levels correct, you must replace the system if any materials are damaged or written off.

Consider keeping one-off or unusual orders out of your MRP system — it generally is a waste of time feeding very particular, detailed necessities into the system if they’re never going to be needed once more.

What subsequent?

MRP has been developing over the past few long time. It was first adopted by large corporations akin to IBM, but the software available today is pitched as a lot at smaller players and MRP is being embraced by producers of all sizes.

The investment required to adopt a smooth-running MRP system shall be greater than repaid by the savings and efficiencies it can convey even small manufacturing companies.

Read extra about how our specialised MRP software for manufacturers can profit your business today.