Manufacturing Resource Planning
Creating value through excellence in efficiently schedule your manufacturing
Manufacturing Resource Planning (MRP) is designed to centralize, integrate and process information for effective decision making in scheduling, design engineering, inventory management and cost control in manufacturing. The software manages invoicing, inventory, shipping distribution, logistics and manufacturing processes. MRP is evolved from earlier Materials Requirement Planning systems by incorporating additional data such as employee and financial needs. MRP is a really powerful and systematic approach to make the Company's manufacturing operation run smoothly and efficiently, reducing time and energy on every step of the mechanism.
Locating All Departments
The first task of MRP is to locate all the important departments of the company. The Profit centers, cost centers and production centers are identified and the company can in addition to manufacturing, include departments like financial management, project management, supply chain management and customer relationship management.
The business will run efficiently when all the departments are working in coordination and the resources are distributed properly and the cash flow is maintained.
Just in Time
The concept of Just in Time extends beyond inventory or warehouse and expands into labor availabilities, raw material arrival, machine availability and so on. It is a highly coordinated processing system in which goods move through the system and services performed, as they are needed. In short, the system ensures the right material, at the right time, at the right place and in the right quantity without the safety net of inventory.
In effect, lower stock holding means a reduction in storage space which saves rent and insurance costs. There is less working capital tied up in stock as items are obtained when they are needed. There is also less likelyhood of stock perishing, becoming obsolete or out of date.
There is a scheduling capability built in the system that concentrates on the resources, that is the plant and equipment required to convert the raw materials into finished goods. The advatages are that detailed plans can be put to the shop floor and can be reported on by operation which offers much tighter control over the plant.
Software Extension Programs
A number of other software programs are included in the MRP that help the scheduling procedure. The most important is Rough Cut Capacity Planning (RCCP) an initial attempt to match the order load to the capacity available by calculating the load per resource.
Overloads are identified and orders can be moved to achieve a balance. This has been described as 'knocking the mountain (the overloads) into the valley (periods of underload)'.
Bill of Materials
The bill of materials is a file made up of bills of materials (BOM). Each BOM is a hierarchical listing of the type and number of parts needed to produce one unit of finished goods, alternate routing or substitute materials that can be used.
MRP translates the master production schedule into component level demand using BOM and direct the purchasing group when to procure based on the component list loaded into the MRP system and the current inventory levels.