Every manufacturer, from car parts to home appliances and anything else you can think of, needs one thing: materials to manufacture products. Without the correct materials, supplies, and supplementary items, not much is going to get manufactured…and if you can’t manufacture things, your business isn’t going to be around too long.
But how do you know how much you’re going to need of certain materials? One method of measuring this need has been growing in popularity over the last few decades – materials requirement planning, or MRP. MRP is a software-based inventory management system stemming back from the days of room-sized computer mainframes, all the way up to the laptops and tablets of today. If your business has been having a hard time predicting the quantities of materials needed to keep up with demand, here’s a few reasons to consider implementing a MRP system:
- Material Availability: Whatever it is you manufacture, a good MRP strategy will keep you provided with the right supplies, exactly when you need them. By measuring customer demand in regards to on-hand materials, you’ll never be caught short-handed if orders for a certain item suddenly increase.
- Reduction in Excess Inventory: In a similar vein, MRP will make sure you only have the materials you need to keep up with orders. This will lead to a reduction in stock overages for materials you don’t use as often (up to 14% on average), which will lead to greater savings and less waste overall!
- Timely Delivery to Customers: MRP ensures that you always have the right supplies on hand when you need them, which means that your overall production time will be reduced by as much as 17%. By always having the materials you need, you can better accommodate customer demand and provide the products they order with much less wait time and overhead.
- Better Use of Resources: A reduction in excess materials will allow your operations to flow more smoothly overall. Workers will have to spend less time stocking and tracking inventory, and you can devote your industrial storage to other, currently needed materials instead of taking up wire shelving space with materials you might not ever need.
- Better Planning of Factory Functions: By planning for the materials you need in advance, you can schedule daily operations more effectively. Manufacturing, delivery schedules, and purchasing can all be scheduled around your MRP projections, and will give you a better grasp of what to order when, and what to do with it when it arrives.
Of course, MRP won’t work perfectly for every facility, and you’ll want to give any change in your materials planning some careful study if you decide to go for a different strategy. Whatever you do, though, remember the goal is to always keep things more manageable and efficient – however you choose to do it!