Category: Material Requirement Planning (MRP)
- What is Material Requirement Planning in Inventory Management?
Better internal communication
Improved material planning
Visibility in the supply chain
Automate redundant tasks
Increased customer relations
- The Effect of Materials Planning on Day-to-Day Operations
- You can set up a Bill of Materials as needed
- Manufacturing costs are calculated accurately
- Manufacturing resource planning is more efficient
- You can optimise your production plan
- It helps with introducing serial and batch numbers
- You can develop your own production reports
Effective inventory management is not only key to increasing productivity by streamlining operations, it can be the difference between success and failure in business.
According to Industrial Machinery Digest, even multinational corporations like Walmart have experienced the risk of disorganised inventory. In 2013, poor inventory control cost them a whopping $3 billion with regular stock-outs suffered by consumers. To address this challenge, companies are relying on Material Requirements Planning (MRP) systems that minimise inventory risk. Here’s how.
What is meant by material requirement planning (MRP)?
This is an incredibly useful software system that is able to analyse your current inventory levels and compare them with the production capacity for manufacturing goods based on forecasts. The MRP will schedule production according to the Bill of Materials (BOM) so that there is no over or underproduction of stock. You should effectively have what you need on hand, when you need it, leading to a much happier customer base and lowering the risk to your company.
What are the objectives of material requirements (MRP) planning?
When it comes to MRP, there are really two key objectives that have to be met. These are:
1. Lowering inventory levels
Your MRP system will consider what is required from vendors, what can be stored in your warehouse, and then optimise this so that you’re not left with a surplus of stock.
2. On-time production
The MRP process will provide procurement and sourcing teams with the required information to execute their respective tasks effectively. The MRP provides production teams with information to analyse how much to produce, and the vendors with the required materials.
What are the features of material requirement planning (MRP)?
You can consider many features when implementing an efficient MRP system so that these two objectives can be met. When deciding on the MRP system to choose, it’s worth considering these features and whether they meet your needs.
1. Purchase planning
This MRP feature provides your purchasing department with what’s needed for ordering or forecasting. This includes a clear list of materials and the quantities for effective scheduling.
2. Demand forecasting
This feature is necessary for business owners looking to grow their companies as it shows exactly how well products are selling. This lets you predict demand for materials and products, as well as pick up on trends, whether they’re seasonal or other. Your demand forecasting feature could have the capacity to produce useful charts, graphs and prediction reports. Demand forecasting ensures you fulfil all your orders on time, with production and lead times accounted for so you get your materials in time for production.
3. Accounting and financial management
A holistic MRP system can include this feature that enables businesses to plan budgets and allocate money for more effective resource planning.
4. Enterprise resource planning (ERP)
ERP is a great feature for MRP as it provides you with the foundation to track all business processes from production to distribution. ERP will monitor your materials, budgets, inventory, cash flow and production schedule by analysing data.
5. Customer relationship management (CRM)
Despite the common misconception, CRM and ERP are not package deals, but rather separate features that can be included in MRP. CRM is helpful when you’re dealing with a large number of customers accompanied by a variety of customer-related issues. CRM automates this into the MRP system or it can be integrated into a third-party CRM platform.
What are the benefits of material requirement planning (MRP)?
Once you have decided on the MRP features you want, and have chatted to a reputable supplier about the best MRP software for your business, you can start to enjoy the huge number of benefits associated with this system. These include:
A good MRP will also act as a communication infrastructure that brings the various departments together in one system. Information from sales can be relayed to other departments so that material and inventory levels can be adjusted accordingly. This continuous data input can be updated on balance sheets which is then converted into useful information for driving business decisions.
This interdepartmental communication and sharing of updated data allows for more accurate material requirements estimation. This means that, when it comes to stock re-ordering, you’re able to meet the target rather than suffering from over or undersupply.
“Across categories, consumer goods companies should understand the factors responsible for growth in demand to determine whether people are actually consuming more or just pantry loading—that is, stocking their pantries in preparation. As manufacturers rethink their commercial plans, these insights are critical to forecast demand after the crisis.” – McKinsey
The system will also automatically analyse historical data for trends that create much better demand forecasting capabilities. In fact, using real-time data, emerging trends and a spike in demand can create a sudden shift in the supply needs. This was made abundantly clear during the Covid-19 crisis, highlighting the need to implement software for increased supply chain stability.
One of the real benefits of MRP is the visibility it provides across the supply chain. Every supply chain interaction leaves a software trail which can be incredibly useful for business as it indicates areas of strength – and potential weakness. In industries such as pharmaceuticals and food where regulations are rigid, this level of visibility is essential for future-proofing business.
The major driver of most businesses is growth, but even where businesses have to scale down, it’s necessary to have a system that meets this flexibility. An MRP system is able to scale up (or down) depending on current requirements, managing hundreds of BOMs, customer and supplier communication and other large-scale undertakings without error.
Every business suffers from mundane administerial tasks that have to be done to keep things operating. Fortunately, with MRP software, these routine tasks can be automated. Duties such as data entry and calculations are done without human input, decreasing error and miscommunication.
“Since the emergence of the internet and immense growth of social media, instant gratification has become an expectation, and the norm rather than the exception.” – Forbes
Customers want what they ordered, as they ordered it, in no time at all. This is the age of instant gratification! By using an MRP system, you’re able to meet this need. MRP is able to collate vast data sources, make instant calculations, and make accurate deliveries so you’re working with satisfied customers. If there are any anticipated delays, letting the customer know ahead of time smooths out any potential difficulties along the way.
This access to updated data empowers you to optimise inventory levels, staff and costs which streamlines operations and improves productivity. MRPs give you such valuable insight that let you monitor the financial well-being of your company.
To find out more about material requirement planning options and enjoy the best features in this software, then Omni is the company to contact. Omni provides you with a customisable system that can be designed to work into your existing operation and maximise workflow.
The Effect of Materials Planning on Day-to-Day Operations
According to Henry Ford, ‘If you always do what you always did, you’ll always get what you always got.’
Do you want to improve your manufacturing output?
Naturally, you want to be prepared to meet the demand for your products. And, you want to minimise your costs while maximising the quality of your goods. Perhaps it’s time to take a look at how you plan your production.
Materials planning improves your manufacturing productivity. And it gives you an added competitive edge in your market. That is – when it’s done properly.
You don’t want to overlook this crucial element of the production process.
Calculating and Predicting
Materials planning is a critical aspect of inventory control. It involves predicting what stock you will need and obtaining it in the right quantities.
As you know, carrying too little stock means that you’ll underproduce. Your customers will have no choice but to look elsewhere for the goods they need. Conversely, running with an excess will cost you more as you’ll have to pay for storage or, even worse, you end up losing money through the wastage of surplus stock.
Manufacturing software can transform your day-to-day operations. It makes your materials planning that much more efficient. Production is influenced by materials planning in a variety of ways. It goes without saying, the more effective your planning, the better your production operations will run.
The point of inventory management systems is to get your stock levels right. This is so that you always carry the right amount of raw materials to meet current production demands. Planning your materials is an exact science, and it’s possible to get your sums dead-on.
Some of the advantages of requirements planning software include the following:
What Is Effective Materials Planning?
Materials Requirement Planning (MRP) is an example of the type of software used to manage the supply of resources and materials.
What are the major steps in MRP production planning?
- Stock and materials on hand (developing a production master plan)
- Inventory – identifying shortages and availability of products
- Correctly timing stock production or purchase in the right quantities (Bill of Materials)
Your inventory involves raw materials as well as finished or unfinished goods. Inventory is often referred to as independent or dependent demand.
Independent demand is a finished product such as a toilet paper roll. Dependent demand refers to incomplete assemblies, components or parts. In our example, this includes cardboard inner tubes, 2-ply, and plastic packaging material.
Requirements planning systems ultimately help you set up schedules for production and purchasing. As you know, it’s important to get timing and quantities just right.
Basically, MRP helps you balance company resources with the demands it needs to meet. It simplifies the decision-making process. So it’s much easier to calculate what raw materials you need to buy. As well as how much stock you need and when.
MRP1 and MRP2
Materials Requirement Planning (MRP) should not be confused with Manufacturing Resource Planning. These are sometimes distinguished as MRP1 and MRP2 respectively. The MRP2 encompasses all resources pertaining to the materials. It goes further than the MRP1 because it deals with the manufacturing resources of the whole company.
Material Requirements Planning involves managing materials. You use it to set up purchasing and production schedules.
Manufacturing Resource Planning is similar. But, it includes all aspects involving the capacity of your factory. It provides a more comprehensive overall manufacturing plan.
The effectiveness of MRP1 and MRP2 depends on the quality of data you provide. These planning systems will only work if you maintain strict accuracy. So, keep all your details (especially the Bill of Materials) up-to-date.
Production Planning is an extension of MRP. It’s an expanded feature of requirements planning software. It uses more complex algorithms to account for production constraints and to prioritise jobs. This software component ensures there are enough raw materials to have production completed on time.
Material Requirements Planning Software
MRP software focuses on the process of creating a product. This process involves identifying and purchasing raw materials. It also includes determining resources and planning production materials.
The initial set-up of manufacturing software takes some investment of time and money. But it’s worth it.
Organising your operations with materials planning pays for itself. It’s a much more streamlined approach to your manufacturing process and supply chain management. However, you need to invest in a package that suits your business. And, knowing how to use it often involves some training.
Implementing a new system needs to integrate throughout the company. It needs to be understood by everyone because the information input needs to be standardised for it to work properly.
Why Is Materials Planning Important?
You can’t underestimate the importance of materials planning in your manufacturing process. Think about your inventory management systems. These, along with materials planning, have far-reaching implications. Better management and planning systems will improve the day-to-day running of your business.
Here are four examples:
1. Better Quality and Service
If you run out of stock and have to rush to make up an order, you increase the risk of mistakes in the manufacturing process.
Producing sub-standard goods can be avoided with effective material planning. Moreover, sometimes the raw materials you need aren’t available at a moment’s notice. So, if you run out, you’re forced to choose between using a cheaper alternative or waiting for the correct materials.
You don’t want a situation where you’re forced to sacrifice either quality or manufacturing lead time. Neither case is a win for your brand.
2. Efficiently Using Raw Materials
Meeting demand is crucial in the manufacturing industry. Optimising your stock or raw materials includes maintaining correct inventory levels.
Efficient materials planning should result in the constant availability of stock. In other words, the stock should always be ready for production teams to process incoming orders. And, whenever it’s needed during a manufacturing run.
3. Optimising Manpower
Planning material requirements effectively means production can be completed on time. This means your employees don’t have to stop working when stock runs out. And they don’t have to rush or face overwhelming deadlines to make up for lost time.
Short-timing your employees is never ideal. Nor is having unproductive workers waiting for material to be restocked.
4. Moving Stock
Materials planning also involves stock movements within the company. During production, raw materials and stock are moved around the factory. They’re also processed by different departments. Some materials may even be shared between different production teams.
It takes good organisation to get the resources to the teams that need them in the correct timeframes.
If you want to get more than what you’ve always got, then maybe it’s time to shake things up a bit. Taking a look at your fundamental operating systems is a good place to start.
It doesn’t matter whether you manufacture toilet paper or high-end confectionery. Materials planning can improve the overall profitability of your day-to-day operations. The better your planning, the better your productivity.
Maybe you already have a working production system in place. You can always learn more about its functionality – even good systems can be improved upon.
If you don’t have any manufacturing software, it’s never too late to give your business an upgrade!
For expert advice on the best manufacturing software package for your business, get in touch with Omni Accounts.
Why and How to Use Batch Number Controls in Manufacturing
If you’re in the manufacturing industry, you know the importance of quality control and the time constraints you face when products are suddenly recalled. Batch number control software is the best way to keep on top of your inventory. However, you have to know how to use it – and which is best for you.
What is a Batch Number?
The batch number is a designation printed on the label of whatever product you manufacture so that you can keep track of each batch produced. In addition to identifying the batch produced, the number will include particulars relevant to control and manufacture.
What is Batch Tracking?
This is a simple way of tracking your batches of manufactured goods to optimise the management of your supply chain and keep on top of quality control. Using batch tracking, you can quickly identify and locate stored goods when they’re being shipped, stored in warehouses, or distributed to consumers.
Which industries use batch number tracking?
This is incredibly useful for all types of industries related to manufacturing, among them:
- Food and beverage
- Cleaning products
- Toiletries and cosmetics
- Construction materials
How Does Batch Number Tracking Work?
If you’re implementing a batch number tracking system, here are some of the steps you can follow to ensure all controls are in place.
Define the batch size: When itemising the batch, you need to ensure the products were manufactured using the same raw materials, by the same machine and team, during the same period of time.
Choose your batch format: Your batch numbers should be unique combinations of letters and numbers. It’s best to include the product’s date and initials for easy searching.
Keep track: You’ll need to log all the details of the batch in a tracking record document.
Label batches: Choose how you’ll label the batches, whether it’s print or sticker, and what type. This could also include a barcode with a serial number.
Include all batch details: Every batch needs information pertaining to the batch. This could include:
- Dates of the manufacturing process
- Bill of materials
- Details of the person verifying the process
- Health and safety information
- Maintenance and cleaning information
- Quality control test results
- Equipment and processing lines
- Supply line details
- Quantity of goods produced
- Best before date
- Weight of active ingredients
Why Use Batch Number Tracking?
You might have a general idea of why batch number tracking is useful, but here’s an in-depth look at why you should be implementing it as a manufacturer.
Using batch numbers, you’re able to quickly identify any defective raw materials which is vital for product recalls. If there is any product defect, whether the materials, parts or machinery, you can easily determine the source of the problem and rectify the situation.
When products need to be replaced or repaired, the batch number will allow you to identify the relevant information, keeping your customers satisfied.
Many countries legally require a batch tracking system which will have to be considered when deciding what to include.
Streamlined Expiring Tracking
For those in the manufacture of food products, batch number controls are an important way to ensure high-quality food production at all times. With batch number controls, the expiration date of food will need to be tracked to keep consumers safe.
Using batch control numbers prevents the emergence of counterfeited items from entering your inventory. This is particularly important if your products are susceptible to fakes, as you can pick up counterfeits quickly to protect your profit margin.
Batch control numbers are also able to provide you with useful insights into your business such as which batches are selling better than others. This way you can quickly notice trends in which items are best to stock.
What Are the Benefits of Automating Batch Number Controls?
If you’re in the manufacturing industry and are looking at implementing batch number controls, you will probably be considering an automated system. Here’s why an inventory management system such as this can be so beneficial to your business.
- This can be a really affordable and user-friendly process when you’re working with the right company.
- With batch number tracking automation, you’re able to improve integration, compliance and customer relations.
- This simplifies your quality control as you’re easily able to track your products across the company.
- Automation gives access to everyone in your organisation, as they can easily access, trace and verify batch numbers and warranty information.
- Through automation, you’re able to quickly troubleshoot which means tracking and removing any expired products from the shelves.
- With batch number automation there’s improved accuracy which means improved regulatory compliance and less chance of charges.
- Improved compliance means more likelihood of increased sales over time.
- With automated batch number controls, there are fewer accounting errors than with manual tracking.
What Are the Features of Batch Number Tracking in Manufacturing?
Automated batch number control systems are made even easier with the latest features. When investing in a new system, you might want to consider what features are best suited to your organisation. Here’s a look at some of the options available:
Certain batch number control software comes with auto-populating instructions that guide users through the entire process.
The batch number control software can also come with log-ins and sign-offs with double authentication requirements for added security.
Certain software comes with industry-specific compliance management tools that collect information and documents required by law.
An efficient system will come with quality control features to assist in quality testing data that tracks deviations and identifies any discrepancies in inventory.
A batch number control system will be able to integrate with existing warehouse and inventory management systems, thereby updating the system with material use and allowing for real-time inventory control.
Modern batch number control systems are now available with mobile capabilities so that you can access your software from any mobile device. This means no need for hard copies and you’re able to check on your inventory wherever you are.
Certain systems come with specialised instructions and records such as master packaging and batch packaging records. This is particularly useful for manufacturing companies specialising in pharmaceuticals.
Converting Unit of Measurement
If you’re manufacturing items that use different units of measurement, you’ll require specific software that automatically converts these base units for improved accuracy.
You might need to restrict access to your batch number control software depending on what you manufacture. This will require security controls that enforce signing off on various procedures throughout the manufacturing process.
There are specialised batch number control systems in the chemical manufacturing industries that will actually integrate with your equipment. This could be scales, thermometers, or pressure sensors so that all readings are automatically calculated.
If you’re finally convinced that an automated batch number control system is the way to go, but you’re not sure what to do next, then contact Omni Accounts. They provide industry-leading software solutions specific to your industry for a seamless and efficient inventory control system.
What You Need to Know About Material Requirements Planning (MRP)
Suppose you’re in a business that works with inventory and are looking for an innovative way to improve your business productivity. In that case, Material Requirements Planning (MRP) is something to consider. Here’s what you need to know.
What is MRP?
Material Requirements Planning is a computer-based system, often used in manufacturing and fabrication industries, that manages inventory, production and scheduling. Through MRP, companies can forecast the amount and type of products they need to purchase and the amount of raw material that will need to be purchased for manufacture.
How MRP Works?
Your MRP system works backwards in that it uses the production plan of the finished items and converts this into a list of requirements for raw materials and components. Through this, MRP can determine precisely what is needed, how much is required, and when it’s needed for effective inventory management.
What Is the Difference Between MES and MRP?
MES is a Manufacturing Execution System that handles the manufacturing process’s execution, keeping plant operations running smoothly while coordinating between the office and the floor. MRP software deals with the planning processes, keeping track of everything used and built in the manufacturing processes. It shortens delivery times through resource planning, machine scheduling and labour load planning.
Some MRP Software to Ease You In
As with all technology, there is quite a bit of new terminology you’re going to need to familiarise yourself with before diving in. Here’s a quick dictionary of MRP.
– Low-Level Code
This is the lowest level code for any item in your bill of materials (BOM), determining your MRP itemisation sequence. This way, the MRP can plan system demands in the product chain.
– Product Structure Tree
This visually displays your BOM, including all the parts needed to manufacture a product.
– Lot Size
This is the number of units you will be ordering for the manufacturing process.
– Scheduled Receipts
These are all the open orders for products that your company has but has not fulfilled as yet.
– Projected On Hand
This refers to the amount of inventory that should be available once your gross requirements are met.
– Lead Time
The time that’s required to manufacture an item from start to finish. Ordering lead time refers to the time from starting the purchase to receiving the purchase, while manufacturing lead time is the time it takes from start to end of product manufacture.
– Cumulative Lead Time
This is how long it takes to develop a product, calculated looking at the BOM.
– Past Due
This is when your orders are suddenly behind schedule.
– Gross Requirements
This is the total demand item for a specific period, calculated by forecasting the number of units, material requirements, current and ordered stock.
– Net Requirements
Using the gross requirements and inventory, you get the actual quantities for a specific time.
– Planned Order Receipts
To ensure the inventory doesn’t drop below a certain threshold, you’ll have planned order receipts to determine the number of orders needed in a time.
– Planned Order Releases
This is the amount you are planning to order for a specific period.
– Master Production Schedule
This is the schedule of finished products which drives the MRP process.
What Are the Benefits Of MRP For Your Business?
If you’re considering investing in a Material Requirements Planning system but are still weighing up the options, then here’s a look at the advantages of this innovative system.
1. Inventory Control
Using data sourced from the production schedule, MRP can determine exactly how much inventory your business requires so that you’re meeting the actual demand. You’re benefiting because the MRP system will reduce the carrying costs while ensuring you always have the optimum inventory level.
2. Resource Management
In the manufacturing industry, you have to have up-to-date information about what raw material is available and what resources are needed for manufacture. MRP systems can provide businesses with this information, including when extra staff are required to have absolutely no delays.
3. Saving on Time
Using an MRP system, you’re able to automate operations, thereby minimising reliance on manual labour. This reduces the risk of ‘human error’ in the system and saves valuable time. The management and storage of production data eliminate the need for extra staff and, in some cases, entire departments.
4. Saves on Costs
Your MRP system will assess exactly how much material is needed for manufacture, so you’re not over-ordering, but it will also determine the cost of the materials required as well, from shipping and storage through to transport. MRP provides you with the most cost-effective selection, further saving you money.
5. Data Handling
All businesses work with vast amounts of data daily, manufacturing industries included. Fortunately, MRP systems will assist manufacturers in handling all of this data, including data related to document purchase, inventory, delivery and cash flow. It will then present this in a visually accessible way through reports and lists.
6. Work Scheduling
Your MRP system can analyse all the available inventory and then use this information to create an overview of your work scheduling. This includes management of equipment, labour tasks and daily operations and predicting labour and operational costs.
7. Purchase Planning
The MRP system will track all the production steps, schedules, and deliveries to identify when purchases need to be made. By knowing what is available and what to buy, and when you’re able to streamline the entire production process.
8. Production Planning
You’re now able to prevent any delays in your production line as Material Requirements Planning detects bottlenecks and then re-routes production to streamline operations. This is particularly important when there are material availability constraints.
What Are the Best Features Of MRP?
It’s clear that MRP is hugely beneficial to all businesses, but you must discuss your particular requirements with the MRP vendor. They’ll be able to outline exactly what features you’ll need for your business operations, but to give you an idea, here are some of the top features.
– Enterprise Resource Planning (ERP)
ERP is a type of software that manages your day-to-day business activities, including accounting, procurement, project management, risk management, compliance, and supply chain operations. If you’re investing in MRP, you’re going to benefit hugely from ERP capabilities as it provides you with the foundation for tracking all major business processes, from production to distribution. Using ERP in MRP, you can monitor the materials, cash flow, budgets, inventory, purchase order and schedules.
– Accounting and Financial Management
If you don’t have existing accounting software or you’re looking to upgrade, then consider an MRP system that has accounting and financial management features. Using a simplified all-in-one system will allow you to plan your budgets, check revenues, and allocate money to resources.
Using MRP forecasting, you’re able to predict the demand for your products, as well as your material requirements and forecasted sales. By assessing how well certain products are selling, you’re able to pick up on market trends and better plan for future business operations. If you can get an MRP with a reporting feature, you’re able to benefit from charts, graphs and other visual forecasting material.
– Customer Relationship Management (CRM)
While most MRP systems have a CRM feature, it’s not always the case so you must check ahead of time. CRM will help your sales staff when it comes to analysing customer trends and requirements, thereby improving customer relations. For large companies that deal with several customers at once, CRM can even automate customer-related issues for more streamlining while freeing up employees.
– Purchase Planning
This feature allows you to determine which materials must be purchased for the manufacture of a product. With purchase planning, you’re able to plan and account for all resources needed accurately, so there’s no missing of deadlines or oversubscribing on raw materials. It takes all the guesswork out of purchase planning, so there’s no expiration or waste.
– Demand Forecasting
You’re able to accurately fill your production orders using this MRP feature which identifies manufactured items dependent on other manufactured items. The current and future demand for products allows you to accurately staff and supply your warehouse with the required resources to fulfil demand.
– Master Production Scheduling
This feature will use your sales and service orders to create a detailed production plan that fulfils your production needs. The master production schedule knows how much of a product needs to be made so that there’s sufficient staffing, raw materials, tooling and other resources. Once again, you’re benefiting from waste reduction and streamlined operations.
– Cloud-Based Software
With remote accessibility vital these days, a cloud-based MRP will allow you to access your system from anywhere. This gives your team much more flexibility while also offering continued customer support. Your team can also seek assistance at any time.
– Ease of Use
You’re going to need an MRP system with a friendly interface so that everyone, from all departments, can access and use the software easily. This will also reduce miscommunication between teams because when a system is simple to use, people will use it.
For manufacturers that rely on direct sales, the MRP must be integrated into an e-commerce platform and accounting software for business scalability. If your MRP software has accounting features, you won’t need to worry about integration.
What to Consider When Choosing MRP Software
It’s evident that Material Requirements Planning is a hugely effective tool for the manufacturing industry, but there are so many to choose from you have to know what your business needs are first. Here are some crucial points to consider before investing in this software.
– Strategic Requirements
Depending on your business size and plans, you will have different MRP strategic requirements. You’ll need to consider whether you’ll be introducing new product lines or services as this will have to be taken into account.
– Data Security
With data breaches a growing concern for businesses, it’s important to check with your MRP vendor what the level of security offered is.
– Functionality Needs
Do a thorough business analysis to determine your current needs and consider future needs for growth. While you want to invest in MRP software that is scalable, you don’t want to be investing in software with excess features you’re never going to use.
– Updating Software
Cloud-based MRP software can provide off-site hosting and ongoing updates so that you’re always benefitting from the latest version. Check that your vendor will provide upgrades to the system – whether on-site or cloud-based – as well as ongoing support for new features.
– Other Users
It would help if you spoke to other manufacturers about their software choice, as this will give you real-world insights into its operational efficacy. Your potential MRP vendor should be able to put you in touch with existing customers so that you can ask about customer service, learning curves and actual operation.
– Do a Trial Run
Most vendors will offer you a full-feature trial of the MRP software so you can try it out in a real-world environment. This way, you can quickly determine whether it’s user-friendly and has the features you require for ongoing operations.
Finally, the most important thing to do when choosing MRP software is to ensure you’re working with vendors with industry-specific experience and will provide ongoing support. They should be willing to take the time to walk you through the options available and explain exactly how the system will be implemented and integrated into your business. Omni Accounts, a leading MRP software vendor, will provide you with all the necessary information and support that makes this a seamless, business-enhancing process.
MRP vs ERP systems – understanding the differences and benefits
The manufacturing industry primarily requires software systems to assist with material planning and manage manufacturing processes. Currently, MRP and ERP systems are the most prevalent – here’s a look at how the two compare.
What are MRP systems?
MRP – Material requirements planning – is software that assists businesses with manufacturing processes by streamlining manufacturing efforts. The MRP system will be able to forecast material requirements to maximise the production rate and reduce spoilage. This will boost the production of a manufacturing organisation, ensuring the right amount of material is available on the correct date.
What are ERP systems?
ERP – enterprise resource planning – is used predominantly by larger businesses in manufacturing (and other) industries as it assists in the management of manufacturing processes including production, planning, scheduling and inventory oversight. ERP software centralises information, allowing businesses to use the accumulated data to make informed business decisions.
Differences between MRP and ERP systems
Although both software systems are used in the manufacturing industry, there are a few key differences that determine where they are best suited.
1. Price of MRP and ERP systems
As with most things in business, the initial cost does factor largely in the decision, and ERP systems are certainly the costlier option. The reason for the extra cost is that ERP systems are able to perform a number of functions that MRP systems cannot, but if your business requires these specific functions then the higher price will be worth it down the line.
2. Solo vs Integrated
One of the reasons for the higher price tag on ERP software is the fact that it is integrated, allowing it to connect with other software systems. Because of the modular nature of ERP, aspects of the software can be selected to suit an individual business’ needs. With MRP, the software is standalone, using only manufacturing tools for its functionality.
3. Number of users
The integrated nature of ERP software means that it will be used inter-departmentally, with an unlimited number of people able to use the system. This allows everyone from HR to the sales’ department to check on the data. MRP is used solely for manufacturing operations which means it only needs to be used by people within the department, such as warehouse managers or warehouse workers overseeing production planning and inventory.
4. Range of features
As an integrated software solution, ERP boasts a range of features, including accounting and HR processes. MPR systems are much simpler as it only focuses on the manufacturing aspect of an organisation.
Questions to consider before choosing ERP or MRP
To narrow down your software selection, here are a few questions to go over before deciding between the two.
- What software programmes are used by the company?
If it’s several that need to be integrated, ERP systems are favourable.
- What processes need to be automated?
If it’s simply manufacturing processes, then MRP systems are the first choice.
- What IT resources are available in the company?
Both systems will require training and IT resources, although more will be needed for ERP systems.
- What is the projected company growth?
If rapid growth is projected, the business might require integrated automation and an ERP system would support this.
- What is the software budget?
ERP is a costlier option but worth the investment if the system will benefit the company in the long-run.
For an organisation requiring an integrated solution, ERP software is the right choice, however, MRP systems are certainly the go-to option for those only seeking a manufacturing solution. Either way, it’s important to consult with industry experts to find out how best to maximise business operations using these valuable software options.