MRP - Material Requirement Planning

MRP can be applied even by very small manufacturing companies to assure a smooth flow of product.





No longer the big buzzword it once was, MRP is now just expected. At one time (and still, for some manufacturers) each function of the process was handled by a separate software package, and the packages might not be tightly integrated (or integrated at all). MRP software packages geared to small manufacturers have been available since the early '80s.

The primary control focus of an MRP system is Order Entry. Once an order is entered (and it may be an internal order to build for stock), all the manufacturing functions are put into motion. These include:

  • Cost Estimates - a function of Order Entry. Cost builds can be ordered from information in the other modules.
  • Order Entry - where the demand originates. Orders may be scheduled for periodic builds.
  • Inventory Control - do we have any of this stuff already built? How much?
  • Bill of Materials - what parts are needed to produce the product. BOM provides a complete multi-level build "blow down".
  • Purchasing - what parts called for by the BOM are in stock and which ones do we have to buy, and when do they have to be here.
  • Manufacturing Floor Control and Scheduling. Controlling allocation of personnel and resources.
  • Invoicing - where an order is transformed into an Invoice and shipping documents. Partial shipments and periodic shipments are allowed for, and will draw down the order quantity.

"So what's the difference? Peachtree has most of that. Why would I need to pay more for a special manufacturing package?" The difference is hard to see on paper. The feature lists look a lot the same, but in use they are very different. The difference is easy to see in daily use.

A general accounting package is written from the viewpoint of the accounting office. It is structured for "after the fact" reporting and data entry. Manufacturing features are tacked on so the feature list looks good, but are designed to support the accounting section, not daily operations, and may be hard to use.

A manufacturing package starts from the viewpoint of the shop floor and daily operations. It emphasizes "real time" data entry and reporting and making the most used functions easy to use.

So a choice of software packages depends on who is considered most important in your company, the accountants, or the people who get product out the door. Your call.

When an MRP system becomes further integrated into the back office functions of accounting, payroll and human resources, and with the front office functions of sales, marketing and strategic planning, it becomes an ERP (Enterprise Resource Planning) system.

At Automation Access, we put in our first manufacturing package in 1986, based on Inmass, a package that is still available (updated, of course). It ran with only minor adjustments until it was decommissioned in 2000 (the client now does only distribution).

©:Andrew Grygus - Automation Access - -
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