A manufacturing company needs to run its operations smoothly with control over the quantities and delivery timings of raw materials and components, which are required to produce the finished product. Planning and control will help to avoid stock outs on the one hand and excessive inventories on the other. It is also vital as a forerunner to the utilisation of resources, the planning of capacity and the scheduling of work. Such a system is materials requirements planning (MRP).
MRP links purchasing, manufacturing and inventory management and has been a tremendous help in managing the supply chain and manufacturing logistics. MRP is computer aided system, which can be bought off the shelf from one of many software suppliers and then used “as is” or tailored to suit or at its most basic level it can be created in Excel.
1) Information on what is going to be produced in a future time span and what is fixed in the short term of that time span and what can be changed (the master production schedule – MPS)
2) The bill of materials, which is a listing of sub-assemblies, component parts and raw materials, levelised in a hierarchical format showing what order they are assembled in
3) Lead time information for purchased items and for items being worked on, on the shop floor
4) A complete and up to date record of all materials and components held in inventory.
By using the above information, arithmetical calculations are made to establish; what to order and when to order, from suppliers and from the shop floor, such that receipts of bought out parts or made in parts fit with the requirements plan. Other sophistications can also be added. As indicated earlier MRP is a computer aided system and aided is the operative word, because before purchasing such a system operational personnel need to know; their business, what MRP is about and how it can help their activities.
C&G International consultants have assisting companies to make progress towards implementing an MRP system. The process involved setting up a Resource Planning Team and training them in aspects of MRP such that over a period of a number of weeks they were capable of manually creating a Master Production Schedule (MPS) for their company. The MPS involves numerous detailed information and inputs including;
• Bill of Material (BOM)
• Inventory records
• Machine capacities
• Accounting information
• Machine breakdown info
After manually running the system for a month the Resource Planning Team recognised 3 significant points;
1) The manual system was identifying points of production concern before they manifested into problems on the shopfloor.
2) The time spent manually tracking the information was significant.
3) A computer based MRP system would significantly reduce the amount of time spent manually controlling the system and would provide additional benefits.
To explore the benefits of an MRP system for your organisation Contact C&G International Inc.