MRP – so what’s it all about?

For an operation to run smoothly, getting materials on time is crucial within the supply chain. If delivery is not right on time or an incorrect amount of supplies were ordered, that could mean disaster for a production facility. Mishaps like these cost money, which ultimately slow down the growth of an otherwise thriving manufacturing operation.

Developing a systematic approach, such as Material Requirement Planning (MRP), can generate a plan that is needed in order to have the correct amount of materials delivered to a certain location in the right amount of time. Material Requirement Planning (MRP) is a planning and scheduling system that orders materials within a specific time, based on the data that is presented. With the master schedule having a plan of its own, it handles the component pertaining to the amount of materials needed in a timely manner and relieves the headache of dealing with manually ordering materials. With this system, there are various advantages and disadvantages.

Advantages of MRP

Since MRP is a demand-oriented system (based off of number of orders, forecast, etc.), it works well with facilities that have a steady flow of demand and are not often presented drastic changes throughout production periods. Along with a steady flow of demand, accurate data is a must. If the system is interpreting the wrong data, this can cause problems within the operation. If your facility does relatively well with demand-forecasting and data accuracy, MRP can improve the company in various ways such as:

  • Tracking & Forecasting Enhancement
  • Data Sharing Accessibility
  • Boost in Customer Aid
  • Easy to use, Integrated System

The perks of this system can greatly enhance a facility, but it is not a fix-all of course. Along with the advantages, there are drawbacks of this system that may not be compatible with an operation.

Disadvantages of MRP

With MRP being demand-oriented, this very obviously can be detrimental to a company that is not necessarily dependent on demand forecast. Without smooth demand and lead-time replenishment regularity, there is not a lot of room to adjust the system – leaving you with either too little or too much of a any given material.  This is why companies that have relatively simpler operations may be a better candidate for MRP systems instead of a facility that leans more on the complex side. 

MRP’s other drawbacks include:

  • Customization Restrictions
  • Inflexible System; Not Compatible for Specific Organizations
  • Operation Process Re-Organization
  • Steep Cost for Installation/Operating

If a production facility has or wants an increased level of feedback and reaction capabilities, perhaps an advanced planning and scheduling system (APS), may be the solution to such an operation. 

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