Material Requirements Planning (MRP) requires using a computer-based system to assist you in determining better scheduling and placing of orders for the component parts of your finished product. These parts can be items such as raw materials or other parts needed for manufacture. MRP is useful for making sure that needed materials are available, as demand for the finished product varies. MRP systems can be applied to any manufacturing operation. After identifying the finished product and all of the components that are part of the product, creating a simple MRP system helps answer how much is needed and when.
Identify for which product or products you want to use the MRP system. It is useful to focus on one or two products initially to make sure the system runs smoothly. If there are many products, identifying the top or key products serves as a focal point for later MRP system development.
Obtain support and commitment from management on system implementation and products selected and establish a project time line. A supportive and involved management unit helps the implementation process run more smoothly.
Educate management on the benefits of implementing an MRP system. As the project organizer, you may have to justify why such an investment should be made, and having provided some background information to management will help during the justification process.
Select a team of individuals to serve on the MRP implementation and management team. The individuals do not have to be in management roles, but should ideally be familiar with the product and its manufacturing process. Including a member of upper management is beneficial for the overall decision-making process.
Create an input list for the MRP system. With the team, use a bill of materials, master production schedule, and inventory records as the input data source. The bill of materials lists all raw materials, component parts, sub-assemblies, and assemblies needed to produce the finished product.
Repeat step 5 for the next product, creating another input list. For each product made by a different manufacturer, a separate bill of materials will be available. Bills of materials are arranged according to hierarchy so the materials are clearly listed and it is known what is needed to complete each level of production.
Enter the bill of materials data into an Excel file with macros. Using Excel, you can enter the article code from the bill of material, the quantity of material available, and reserve stock.
Provide training and education to all affected by the new system. It is important to communicate the importance of the system and how everyone will benefit by contributing accurate and current data on a regular basis. Reward systems can be used to reflect productivity as related to management goals.
Implement the MRP system and conduct MRP system training using a team created process outline. Training can emphasize how MRP is used and how it helps production managers plan for capacity.
Properly implemented MRP systems can be expensive and require a lot of time to put together.
The quality of the system's output also depends on the quality of the input data, so accurate bills of materials, part numbers, and inventory records should be kept.