Material Requirement Planning
Proper management of materials makes manufacturing process efficient as it helps in
stocking the required raw material, achieving the production targets and on-time deliveries
of customer orders. Acceasy’s Material Resources Planning (MRP) allows you to achieve all
this on real time basis.
MRP also assists in the overall process of managing materials. MRP ensures proper
management of the materials for any given production job in ways that are essential to keep
the production going as per schedules and without any excessive or diminishing inventories that
are either way harmful to the business. You can check the status of all necessary materials at
any given time, so that you could more accurately plan and execute daily manufacturing
An MRP system is intended to simultaneously meet three objectives:
- Ensure materials and products are available for production and delivery to customers.
- Maintain the lowest possible level of inventory.
- Plan manufacturing activities, delivery schedules and purchasing activities.
- Companies need to control the types and quantities of materials they purchase, plan which products are to be produced and in what quantities and ensure that they are able to meet current and future customer demand, all at the lowest possible cost. Making a bad decision in any of these areas will make the company lose money. A few examples are given below:
- If a company purchases insufficient quantities of an item used in manufacturing, or the wrong item, they may be unable to meet contracts to supply products by the agreed date.
- If a company purchases excessive quantities of an item, money is being wasted – the excess quantity ties up cash while it remains as stock and may never even be used at all. However, some purchased items will have a minimum quantity that must be met, therefore, purchasing excess is necessary.
- Beginning production of an order at the wrong time can cause customer deadlines to be missed.
- MRP is a tool to deal with these problems. It provides answers for several questions:
- What items are required?
- How many are required?
- When are they required?
- MRP can be applied both to items that are purchased from outside suppliers and to sub-assemblies, produced internally, that are components of more complex.
Key Features :
1) Improved on-time Production
Manufacturing organization using MRP should be able to achieve on-time production because no delays for lack of raw materials. On-time completion helps improve customer service and profitability.
2) Reduced inventories
Inventory falls – typically by 20-35 per cent – because raw materials are not ordered when needed.
3) Capacity requirements planning data
Work center capacity requirements can be planned for many periods into the future.
4) Improved labour productivity
Fewer shortages means significantly less lost time and less disruption to production.
5) Improved productivity of support staff
MRP assists the procurement staff to ensure timely deliveries of raw materials
6) Total business planning
MRP allows you to take total command of planning to production, which means it allows you to effectively plan and deliver when needed that in turn results in increase of staff efficiency and higher profits.