More About MRP System Implementation and How It Can Help Your Company

Posted by sophiamilller on August 19th, 2013

MRP stands for Material Requirements Planning or for Manufacturing Resource Planning—which later developed into what is now known as ERP. Both names are accepted, because MRP started out being used mostly in manufacturing operations. MRP is a software-based system which is used to plan and go through with a company’s production, as well as manage its inventory system. When implemented correctly, an MRP system can help to bring order into your company’s affairs and optimize your Production planning and manufacturing operations. Keep reading to find out more information about Material Requirements Planning, see how it works, how it can help your business and how you can find a suitable MRP system or consultant for your business.

While Material Requirements Planning started out as being used mostly in manufacturing operations, as previously mentioned, it has evolved so that an MRP system can be applied successfully to a wider range of business operations. And, while Material Requirements Planning evolved into ERP, that doesn’t mean that you should abandon using an MRP system in favor of an ERP system that is not adjusted to your industry’s specific needs. As a business owner one of your main concerns will always be stretching your budget and being somewhat restrictive with your expenditures, so you should never give in and switch to a different system only because one Consultant recommends it, for example.

MRP is used to plan all of a business’ purchasing, manufacturing and delivering activities and processes. This is vital to a business’ success in managing its stocking operations as well. If you don’t purchase enough materials you can’t make enough products to cover the demand. On the other hand, if you order too much material, or too much material of one kind and too little of a different kind, you’ll be left with surplus products or high stock levels, which lead to increased costs and decreased profits—if it’s a chronic state of affairs—to put it simply.

MRP is designed to meet three goals. First, it’s designed to make sure that there are enough materials stocked necessary for production, and to ensure that there are enough manufactured products to cover the current customer demand. Second, it’s designed to help keep issues relating to stock overflow at a minimum. Third, it’s designed to help a business prepare for and plan the shipping or delivery schedules, as well as the purchasing and production activities as well.

If you’re presented with the option of switching from an MRP system to an ERP system, don’t jump straight into it. However, if the evidence shows you it’s the best option for your business then go forward and help your company growand move forward with the times. Remember not to take the advice of only one expert for granted. Rather, look at case studies for ERP implementation in companies similar to yours, and see how successful they proved to be on the long-term, if that information is available.

Find out more about MRP, also known as Material Requirements Planning, and see how implementing an MRP system can help your company get more organized and grow.