ERP Practices

MRP Best Practices

MRP stands for Materials Resource Planning.  MRP may also stand for Manufacturing Resources Planning or Manufacturing Requirements Planning.   All of these names refer to the same system.  Essentially an MRP system contains software that has capabilities to process bill of materials, routing, inventory, work orders, purchase orders, transfer orders and other information specific to materials and materials planning. 

The difference between an MRP system and an Enterprise Resource Planning system is that the Enterprise Resource Planning system contains functionality to control all aspects of your business; accounting, human resources, customer relations, etc.  An MRP system only contains materials related functionality. 

A best practice for MRP users involves inventory planning and the use of Just in Time management (JIT).  Planning your inventory levels is essential because you don’t want to overstock and spend lots of money to store your stock.  You also don’t want to under stock leaving you without inventory when big orders are placed.  JIT management allows you to plan your inventory needs and literally receive inventory “just in time” prior to shipping the order.  Your product doesn’t sit in the warehouse and you don’t sit on a lot of expensive inventory or materials.  JIT is a win win situation for you.

Another best practice for MRP users involves planning and control.  Proper scheduling of materials must be planned.  Controlling inventory levels and integrating with financials, sales, and operations planning is essential.

Some detailed best practices include configuring your system properly to enable proper cataloging of your materials.  Creating a well thought out process to add new and / or change existing material vendors is a best practice.   Another best practices is to analyze cost of resources or materials and the manufacturing process.  Analyze your return on investment and make sure needed processes are well automated and stream-lined.

When shopping for an MRP system, look for a vendor that offers software that will be easy to integrate with your existing systems.  Also, vendors that offer education courses are a bonus.  If you or any of your employees need help learning the system, you can always attend a course.  Usually larger vendors offer classroom type courses.  Smaller vendors may offer an online walk-through or online course.  Most vendors offer ample documentation as well.  To select an MRP vendor, check out their website.  Vendor websites generally have product demos on their websites.  The demos provide you with the look and feel of the system and may help you make a decision as to which vendor to select.

Written by :

kristine H