What is requirements planning materials planning (MRP)’
Planning material requirements (MRP) is one of the first software based integrated information systems designed to improve the productivity of the enterprise. In planning material requirements information system is a sales forecast-based system used to schedule raw material deliveries and quantities, given assumptions of machine and labor units required to perform the sales forecast.
Penetration ‘requirements planning materials planning (MRP)’
Materials requirements planning the earliest integrated information systems for improving productivity for business with the use of computers and software technology to provide reliable data for managers. With the advent of such systems, production efficiency can be greatly improved. As data analysis and technology to capture it have become more sophisticated, more comprehensive systems for the integration of PMR with other aspects of the production process.
Planning material requirements for production
Bill of materials (BOM) is the main material for MRP. The specification defines the connection between the end product (independent demand) and the components (dependent demand). Independent demand is the demand occurring outside of the plant or production system, while dependent demand is demand for components.
Companies need to strategically manage the types and quantities of materials they purchase, plan which products should be produced and in what quantities and ensure that they are able to meet current and future needs of customers and all at the lowest possible cost. MRP helps companies to maintain low inventory levels, helping them to plan production, procurement and implementation activities. Making a bad decision in any of these areas will allow the company lose money. By maintaining the necessary inventory levels and production organisations are better able to coordinate their production on the rise and fall of demand.
MRP can be applied both to products that are purchased from external suppliers and components produced within the country, which are components of more complex items.
The data types considered planning material requirements
Data that needs to be considered in the scheme of MRP include:
- The final product is created. This is sometimes called independent demand or level “0” on BOM.
- What is required at once.
- When the quantities required to meet demand.
- The shelf life of the materials.
- Inventory: accounting for the sale of the materials available for use already in stock (on hand) and materials on order from suppliers.
- Specifications: parts materials, parts and assemblies required to make each product.
- Planning data: this includes all restrictions and directions for the production of items such as: routing, labor and machine standards, quality and testing standards, pull/work cell and push commands, lot size techniques (i.e. fixed lot Size, lot-for-lot, economic order quantity), scrap percentages, and other materials.