Material Requirements Planning (MRP) is a Planning and Management System, usually associated with software that handles the production and inventory control. It is meant to have the required materials in a timely manner to meet customer demands. The MRP suggests a list of purchase orders. Program schedules production based on purchases from suppliers.
Basics of Material Requirements Planning (MRP)
Material Requirements Planning (MRP) is a system that tries to explain simultaneously three objectives :
- Ensure materials and products that are available for production and delivery to customers.
- Maintain proper inventory levels for operation.
- Plan manufacturing activities, delivery schedules and purchasing activities.
The main purpose of these systems is to control the production process in companies that operate in a manufacturing environment. Production in this environment is a complex process with many intermediate steps that occur in industrial processes which transform the materials, component assembly to obtain higher-level units until completion of the final product, ready to be delivered to external customers.
The complexity of this process is variable, depending on the type of products manufactured. The basic systems for planning and control these processes, address the problem of material flow management in the company to achieve production targets efficiently, comprising all the same steps :
- Adjusting inventories
- Adjusting capacity
- Adjusting labor
- Adjusting production costs
- Adjusting production deadlines
- Adjusting workloads in different sections
Material Requirements Planning (MRP) is a sophisticated method but, on the contrary, is a simple technique and thanks to the computers.
Material Requirements Planning (MRP) : Objectives and Procedure
The Material Requirements Planning (MRP) determines how many components are needed and when to carry out the Master Production Plan, which translates into a series of purchase orders and manufacturing of the materials needed to meet the demand for final products. It reduces inventories, Reduce waiting times in production and delivery, Determine realistic obligations, Increases efficiency and Provide a scenario of long-term planning. A MRP system must meet the following conditions:
- Ensure the materials and products ordered for production are distributed to customers.
- Maintain minimum inventory level.
- Planning activities: Manufacturing, Deliveries, Shopping
Thus, the MRP is essentially calculate the net requirements of the items needed, introducing a new factor not considered in traditional methods, such as manufacturing or delivery within each of the items, indicating an opportunity to make (or provisioning) components concerning their use in the next phase of the process.