Key things you should know about an MRP System
An MRP System (Materials Requirements Planning) helps a manufacturing company utilize built-in scheduling logic to manage the flow of materials in the manufacturing operation. Companies are looking at ways to reduce inventory costs, drive down lead times while improving customer service, improve the manufacturing process and improve product quality. Using an MRP system, a manufacturer can become much more efficient and better plan the needs for resources, both in terms of materials as well as capacity within the factory and better serve the customer.
There are two types of MRP Systems that can be discussed. First is Material Requirements Planning and the second is Manufacturing Resource Planning or MRPII. A traditional MRP System is one where the software uses the Bills of Materials, Inventory levels, and the Master Production Schedule to calculate and plan the need for replenishment orders. An MRPII system is a system that plans many more functions of the entire manufacturing process, including Capacity Requirements planning, Master Production scheduling, Plan Simulations and all the aspects of the classic MRP system.
Most systems today are MRPII based systems, so from this point forward, if we are referring to an MRP System, we are really discussing MRPII systems as that is what is presently offered in the market and includes the earlier aspects of MRP.
Researching an MRP System often brings about a lot of questions and uncertainty. Not so much about the planning system and how it calculates the requirements, that is usually just a calculation that you can get from a good Material Requirements Planning book from any bookstore or online. Really, the question usually comes about as to where the differences are between the material requirements planning systems.
Essentially, the key differentiators of these systems would be the ease of their ability for them to allow you to see the multiple layers of planning. But even more, the ease in which you can keep the data clean. With thousands of parts and possibly thousands of Bills of Materials (along with the many variations), you will need to be able to easily update or even mass update parts, BOMs, routings and all of the detail surrounding them.
MRP System as part of an ERP solution
As most manufacturing system software is a subcomponent of ERP (Enterprise Resource Planning), it is worth looking at how the materials planning aspect of the ERP interacts with the rest of the system. For example, how well does the system communicate order requirements to the shop floor control system? How well does the Product Data Management aspect of the ERP interact with the Bills of Material module? How well does the inventory control system work with the Quality Management system? For example, if you receive inventory into the system, is there a way to isolate it from the MRP System while it undergoes quality inspections?
When looking at requirements planning systems the real concern is how the users will use it. It needs to be as simple as possible to interact with from a user perspective. However, it needs to be able to drive all of the capacity and material plans that you need to run the business. An important thing to try is to let your material planning or purchasing people try out the system during the demo phase. They won’t be able to run the system without help, but at least they can get a feel for the screens and the depth of information provided.
Another important tip is to make sure that all of your people who are interacting with the system, such as buyers, planners, and inventory managers all have training on the concepts of MRP. This will help them get up to speed quickly once a new system is in place.
Your Future MRP System
When you get down to a short list of vendors, it would be a great idea to start looking at the quality of the information from your existing MRP System. Clean up the Bills of Materials. Obsolete any that are out of date. Ensure that your inventory counts are accurate. Make sure that your customer orders are clean and old back-orders that will never ship are closed. You should begin the cleanup of the data in the source system long before you even think about transferring it to the new system. If you do it a little at a time over a period of months, by the time you are ready to migrate the data to the new system, you will be ready to utilize the new system immediately. At some point the data needs to be clean, it might as well be now.
Lastly, find out early from the software provider of the new system what additional data elements you will need to support their system. You may not be capturing that data currently, so start building the list now. Moving to a new MRP system does not need to be difficult, but it will take some cleanup and planning.