Material Requirements Planning (MRP) made simple
MRP is all about the creation of demand for materials and the satisfaction of that demand by stock on hand and purchase orders.
An MRP system is intended to simultaneously meet three objectives:
- To ensure that materials are available for production and products are available for customers
- Maintain the lowest possible material and production levels in store
- Plan manufacturing activities, delivery schedules and purchasing activities
The process is as follows:
1. Sales back orders and or sales forecasting creates demand for Works Orders
2. Works orders satisfy the demand for sales
3. Works orders and safety stock levels also create demand for raw materials and sub assemblies
4. Works orders for sub assemblies satisfy demand for its parent part but create demand for further sub assembles and raw materials.
5. Raw material and sub-assembly stock on hand plus outstanding purchase orders and works orders satisfy demand for their parent parts
Sounds complicated? It is.
Now add the dimension of time to this. When is production to take place, how long will each works order take as well as the lead time from suppliers, and it is extremely complicated.
But not with Xperdyte Manufacturing... this intuitive & easy to use software solution systematically simplifies the tedious task of Material Requirement Planning.