MRP system – what is it?
MRP (Manufacturing Resource Planning) is an IT system responsible for streamlining the management of resources and production processes. In short, MRP is a production management program.
System evolution
MRP – Material Requirements Planning or Manufacturing Resource Planning?
In its initial version, the MRP system focused primarily on planning and managing materials necessary for production (Material Requirements Planning). Based on the BOM and projected production, the system calculated material requirements, thereby optimizing inventory levels. MRP II (Manufacturing Resource Planning) encompassed much broader aspects of resource planning for a manufacturing enterprise. Materials management was joined by resource planning for people, machines, tools, and finances.
MRP system features
One of the most important functions of an MRP system is the calculation of the Master Production Plan, also known as the master plan. This is a medium-term production plan, typically covering a 2-3-month time horizon, that allows for the definition of production schedules that take into account market demand and resource availability.
The Vendo MRP system precisely determines material requirements, creating procurement schedules for materials necessary for production. This allows companies to effectively manage inventory and avoid delays. Production order management is another important MRP features. It allows for defining the assortment, quantities, and production deadlines of finished and semi-finished products, enabling precise planning of what, how much, and when to produce.
The MRP system also allows for the management of product structures (BOMs) and production technologies. This allows companies to effectively manage bills of materials and production processes, such as routing, production times, work stations, materials, and tools. Detailed production planning is implemented in the APS subsystem, which allows for the scheduling of production operations by work station, taking into account deadlines, the availability of people, machines, materials, semi-finished products, and tools.
The Vendo ERP system, as production management software, supports processes by transmitting information essential for production from planners to workstations. Thanks to the ongoing recording of work progress on the production floor (within the MES subsystem), it is possible to monitor the execution of production orders and quickly respond to any issues. Furthermore, the MRP system supports the planning of tool and workshop equipment availability, ensuring timely execution of the production plan and minimizing downtime.
Thanks to these features, the MRP system allows for effective resource management, optimization of production processes and ensuring timely order fulfillment.
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How does the MRP system work?
Working with an MRP system involves several key stages:
Creating BOMs and technologies
One of the first steps in working with the Vendo system is defining the product’s BOM and technology. In short, the BOM defines the product’s material structure, while the technology defines the production route and time standards.
Masterplan Calculation
The Master Plan, or medium-term Master Production Plan, is created in MRP based on sales plans, framework contracts, and current orders. It specifies what is to be produced, in what quantity, and when.
Creating purchasing plans and placing orders with suppliers
The purchasing plan is created in Vendo based on balancing the following data:
- BOMs,
- inventory analysis,
- deliveries on the way
- issued production orders
- master plan and length of the production cycle
This specifies the quantities and delivery dates for materials. This then triggers the ordering process in the next step.
Generating production orders
Generating production orders and production documentation, such as production guides, is another crucial step in the MRP system. Production orders specify what, how much, and when is to be produced. Production documentation contains detailed instructions for employees at individual workstations, enabling consistent and efficient planning and execution of production operations. Furthermore, the Vendo.ERP system determines the materials and tools required to complete a given order.
Creating a detailed production schedule
The Vendo MRP system, specifically its Vendo APS module, creates detailed production schedules. These schedules define the start and end dates of production tasks, taking into account the availability of resources: people, machines, tools, materials, and semi-finished products.
Production registration
Once production is planned, the system assigns production tasks to employees. Employees continuously record the time and quantity of operations performed. The ongoing production recording in Vendo MES also ensures full traceability.
Settlement of production costs
The MRP system calculates actual production costs and compares them to planned costs. This is achieved by knowing the actual labor time and price of each batch of material released for production.
Benefits
In fact, without an MRP system, managing production and production resources in a medium-sized and larger company becomes very expensive.
- The Vendo system optimizes resource utilization. It ensures appropriate inventory levels and turnover rates. This ensures both material availability and the prevention of financial constraints tied up in excess inventory.
- By better planning resources such as people, machines and materials, the system minimizes downtime and increases efficiency.
- In addition, there is also a noticeable improvement in the timeliness of orders.
- It facilitates ongoing supervision of the production process and quick taking of corrective actions in the event of deviations.
- Allows you to calculate the actual cost of production.
ERP and MRP systems
ERP encompasses all processes supporting company management, while MRP is responsible for the broad management of production resources. An MRP system can function as a standalone application integrated with ERP or as a single system with ERP.
ERP and MRP as one integrated system
Vendo is a single, integrated MRP/ERP system. The advantages of this solution include, above all, that all data is located in one place, significantly facilitating real-time access to information. Data centralization also contributes to improved collaboration between departments, as information can flow freely between different areas of the company’s operations. Improved user ergonomics result from the elimination of the need to use two separate systems; access to data from both the ERP and MRP components depends solely on user authorizations. Improved production planning is possible because the algorithms have access to all data contained in the ERP system, including HR data regarding employee availability and financial data. An additional benefit is the elimination of the costs of integrating different systems.
Some ERP software vendors either don’t offer manufacturing solutions or their functionality is insufficient for the company’s needs. In such a situation, three options can be considered:
- purchasing an external production module or,
- ordering the missing functionality from the manufacturer or,
- replacement of the ERP system.
ERP and MRP as two independent, interconnected applications
The implementation of an MRP system as a separate application is most often decided by companies that already use a well-functioning ERP system in the areas of finance, warehouse, sales and CRM, but need more advanced support in the production area.
The advantage of this solution is flexibility, as a company can choose the MRP system that best suits its unique needs without being limited to the features offered by the ERP system. Furthermore, a standalone MRP system can offer more advanced and specialized features tailored to specific industry requirements.
However, implementing a separate MRP system has its drawbacks. Integrating an MRP system with an existing ERP system can be costly, as the MRP system requires a large amount of data to function properly. This data includes customer orders, sales plans, bills of materials with inventory, prices, and batches, in-transit material deliveries and planned delivery dates, and employee attendance calendars. Furthermore, data synchronization issues can arise when updating each system, which can complicate management and reduce operational efficiency.
Summary
In summary, having a single, integrated company management system tailored to your specific needs is an undoubted advantage. This allows all processes to be stored in a single database, and users work in a single application. They have access to all necessary information without having to log into another system. Integrating complex structures during startup and updates is no longer a hassle.
