Material Requirement Planning (MRP)
MRP planning is crucial for LEAN organizations to be able to capacity plan and mitigate losses. There is a critical need to be able to generate MRP at any time and determine slippage in capacity which enables your company to better plan Manufacturing Order (MO) and avoid delays and losses.
An accurate and robust MRP planning process enables your company to plan 8-16 weeks in advance on orders which synchronizes with scheduling and labor management. Without accurate MRP, it is difficult to plan hiring and down time (thus affecting HR) and results in losses on several levels.
Goals of MRP:
- Ability to generate MRP anytime
- Advance planning
- Determine slippage in capacity
- Determine delays or other timing issues and inform customer (customer relations)
- Determine labor needs accurately especially seasonal and special projects
- Inventory and stock/reordering will be accurate and realize volume discounts (Economic Order Quantity)
- Avoid wastage
- Develop an automated quote system that provides seamless ordering and planning and avoids duplication of effort
The potential ROI resulting from MRP for labor costing and in conjunction with the EOQ (economic order quantity) for volume purchasing is significant; which would equal thousands of dollars a year and result in potential further savings on inventory accuracy.