Written by Rich Dale
24 02 2021

What Is MRP And How Does It Work?

Reading Time: 2 minutes

All manufacturing businesses need to get a handle on MRP, but what exactly is it? And how does it work? In this short guide, we will tell you all need to know.

What IS MRP?

MRP stands for Material Requirements Planning. It was the first computerised procedure for supply planning, and as you can learn within this article on the history of MRP, it was first implemented in the 1970s.

With the right MRP software in place, manufacturers are able to streamline their planning, production and inventory control. Without something to help them with their inventory management processes, they can run out of the manufacturing items they need and find themselves in a position where they are unable to fulfil their customer orders. With MRP in place, however, they will be in a better position to plan their operations and have the tools needed to control and organise the logistics of their inventory.

Ultimately, MRP is essential to the effectiveness and efficiency of any manufacturing operation. It can make all stages of the production process run more smoothly, especially during the later stages where there can sometimes be a risk of inventory shortages. The manufacturer will then be happy when their manufacturing operation is able to run to schedule and the client will be happy when they receive their order by the set deadline.

How Does MRP Work?

MRP software uses information from the bill of materials (BOM), master production schedule, and inventory data, and uses these to calculate the required materials for any given project. 

The MRP system can allow users towill allocate or reserve the stock needed from the manufacturers’ inventory and raise purchase orders for any extra materials that are required. Cleverly, it factors in timescales for the delivery of these outstanding items and calculates when production will need to start to meet the customer’s delivery date.You can learn more by watching the Flowlens MRP demo.

The Benefits Of MRP

There are many benefits to using an MRP software system. These include:

  • Excellent customer service: When you utilise MRP software within your business, you will deliver your project on time to the customer.
  • No material shortages: Shortages can lead to delays in work and unhappy customers, but with MRP, you need never run out of materials again.
  • Improved scheduling: With MRP, production managers will know when production operations need to be carried out. They will then know what labour they need and when, without the consequence of staff shortages or expensive overtime.

You can understand more about the benefits of MRP here.

With an MRP system in place, you can simplify the processes that are needed in your materials requirement planning. While some manufacturers will organise their MRP with spreadsheets, you will find it easier to use the software that we can provide, as you will save time and eliminate the possibility of human error. 

Interested to find out how Flowlens Cloud MRP & CRM could transform your business?
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