What is MRP Software?

Manufacturing resource planning (MRP II) is used to manage manufacturing processes, production planning, inventory control and resources of a manufacturing company. MRP software is meant to ensure materials that are required for production are available and ready for delivery to clients and customers. Other goals of an MRP software are to maintain a low level of inventory, to reduce overhead costs, retain flexibility, to coordinate delivery schedules and plan purchasing activities.

Why use MRP Software?

MRP software allows a business to streamline the manufacturing processes and allows for control of inventory, billing and delivery. As customer demand grows for products,  a company will face issues meeting the demand as customer needs will outpace the rate of manufacturing. It is important to meet that demand as if a company is unable to do so their window of opportunity may close on their product. On the other hand if a company purchases too much inventory, it will become non flexible and if any catastrophe occurs it could mean dire financial consequences for them.

As consumer demand rises, a company needs to control which materials they purchase. Materials range from type, quantity, seasonal materials and various other factors that should be taken into account as well. MRP software will deal with what materials are required for certain products, how many of each product is required and the timing of when they are required as well. Other benefits include improved design, improved quality control of items throughout the manufacturing process, increased productivity, improved relationships with suppliers and improved accuracy of inventory levels.

Cons of an MRP Software

MRP software faces certain data integrity issues that can cripple the organization if not taken care of.  Data is supplied by staff and transferred over to the master production schedule, then used in calculations across the system. Typical errors include non reported items, stolen items, wasted items, having errors in inventory, damaged items, counting errors, supplier issues and various system glitches. 

Solutions to data integrity issues

With a manual audit of data staff can verify that data is accurate and will be able to find the root cause of issues. With manual audits staff can verify billing issues, cycle counts and scrap reporting. However, this method is time consuming and expensive.

Additional solutions are bar code scans for certain products in order to ensure there is no error in data entry. Even though a bar code scanner or RFID reader may be costly in the short term,  such a product can allow the organization to maintain an accurate level of inventory in the long term.