Companies that produce finished products from purchased components and parts, and manufactured components and parts need a systematic way to plan their needs for those components and parts, and this is what material requirements planning can do.
that beside reducing basic raw materials, the required assemblies, according to what is available in stock or on demand, and finally develop a schedule for arranging the purchased and produced materials.
In this article, we will talk about what material requirements planning as well as its objectives and the most important steps of material requirements planning.
What is Material Requirements Planning (MRP)?
Material requirements planning (MRP) is a computer programmed information system to help manage demand inventory and schedule re-supply orders in time to meet shortages or shortages to assign and execute master production schedules.
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What is the importance of Material Requirements Planning (MRP)?
As for the importance of using material requirements planning (MRP), it is great as it is a set of methods that consider the main production schedule and other information from stock records and product structure records as inputs to determine the requirements and schedule for each item.
Based on the master production schedule, material requirements planning (MRP) creates schedules that specify the parts and special materials required to produce the final items.
Then it proceeds to determine the exact numbers required, and also determine the dates of issuing orders for these materials, based on the delivery periods.
1. Identifying requirements to meet demand
It is the first step in material requirements planning (MRP), through which the customer’s demands are identified as well as the basic requirements to meet his requirements.
A bill of materials is used, which is a list of raw materials and components required to manufacture a final product.
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2. Checking inventory and allocating resources
The second step in MRP is to check demand according to the inventory and resource allocation.
In which requests are checked and verified in your inventory, materials are then distributed through material requirements planning (MRP) accordingly.
3. Scheduling production
The third step is production scheduling, in which the time and labor required for the manufacturing process to be completed and complete is calculated, after which a deadline for delivery is set as well, which is a very accurate step.
4. Identifying issues and making recommendations
The final step in material requirements planning (MRP) is to identify issues and making recommendations and monitor the processes that took place in the previous steps and verify that there are no issues with them.
Also, in this step, alternative or emergency plans can be suggested when there is any delay in the delivery of the deadline.
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What are the Benefits of MRP?
There are many benefits that result from the use of material requirements planning (MRP), as it is one of the most important tools that help manage demand inventory and achieve many benefits for facilities.
The following are the most important points that illustrate the benefits of material requirements planning:
- Reducing inventory levels and thus reducing inventory costs.
- Improve the efficiency of production scheduling.
- Improving the level of use of resources (people and equipment).
- Increasing the customer service level.
- Respond quickly to market changes.