Material Requirements Planning
Material requirements planning (MRP)
Material requirements planning (MRP) is a production planning and inventory control system used to manage manufacturing processes. Most MRP systems are software-based, while it is possible to conduct MRP by hand as well.
An MRP system is intended to simultaneously meet three objectives: * Ensure materials are available for production and products are available for delivery to customers. * Maintain the lowest possible material and product levels in store * Plan manufacturing activities, delivery schedules and purchasing activities.
The scope of MRP in manufacturing
The basic function of MRP system includes inventory control, bill of material processing and elementary scheduling. MRP helps organizations to maintain low inventory levels. It is used to plan manufacturing, purchasing and delivering activities.
"Manufacturing organizations, whatever their products, face the same daily practical problem - that customers want products to be available in a shorter time than it takes to make them. This means that some level of planning is required."
Companies need to control the types and quantities of materials they purchase, plan which products are to be produced and in what quantities and ensure that they are able to meet current and future customer demand, all at the lowest possible cost. Making a bad decision in any of these areas will make the company lose money. A few examples are given below: * If a company purchases insufficient quantity of an item used in manufacturing (or the wrong item) it may be unable to meet contract obligations to supply products on time. * If a company purchases excessive quantities of an item, money is wasted - the excess quantity ties up cash while it remains as stock and may never even be used at all. * Beginning production of an order at the wrong time can cause customer deadlines to be missed.
MRP is a tool to deal with these problems. It provides answers for several
Material requirements planning (MRP) is a production planning and inventory control system used to manage manufacturing processes. Most MRP systems are software-based, while it is possible to conduct MRP by hand as well.
An MRP system is intended to simultaneously meet three objectives: * Ensure materials are available for production and products are available for delivery to customers. * Maintain the lowest possible material and product levels in store * Plan manufacturing activities, delivery schedules and purchasing activities.
The scope of MRP in manufacturing
The basic function of MRP system includes inventory control, bill of material processing and elementary scheduling. MRP helps organizations to maintain low inventory levels. It is used to plan manufacturing, purchasing and delivering activities.
"Manufacturing organizations, whatever their products, face the same daily practical problem - that customers want products to be available in a shorter time than it takes to make them. This means that some level of planning is required."
Companies need to control the types and quantities of materials they purchase, plan which products are to be produced and in what quantities and ensure that they are able to meet current and future customer demand, all at the lowest possible cost. Making a bad decision in any of these areas will make the company lose money. A few examples are given below: * If a company purchases insufficient quantity of an item used in manufacturing (or the wrong item) it may be unable to meet contract obligations to supply products on time. * If a company purchases excessive quantities of an item, money is wasted - the excess quantity ties up cash while it remains as stock and may never even be used at all. * Beginning production of an order at the wrong time can cause customer deadlines to be missed.
MRP is a tool to deal with these problems. It provides answers for several