6 Reasons Manufacturers Need an MRP Solution

The editors at Solutions Review have partnered with Deskera to outline a few reasons why manufacturing companies need to work with an MRP solution.

As common as it is to see ERP systems associated with the manufacturing and distribution industries, each market has specific needs that not every solution provider can meet, and sometimes, a general ERP platform isn’t enough. That’s where Material Requirements Planning (MRP) solutions can help. These cloud-based platforms are used in manufacturing and production management to help businesses plan and control the materials, components, and resources needed to produce goods. It uses computer algorithms and data—like production schedules, lead times, order quantities, and current inventory levels—to calculate the resources needed to complete a project on time. 

However, as valuable as these solutions can be, not every manufacturer takes advantage of them. To help, the editors at Solutions Review have partnered with Deskera to outline a few reasons an ERP for manufacturing can give companies the edge to improve inventory management, reduce excess stock, minimize shortages, and streamline their end-to-end production processes.

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6 Reasons Manufacturers Need an MRP Solution

1) Improve Inventory Management

Having an excess inventory is never something a manufacturer wants. When inventory sits on shelves, it means paying rent for space on shelves that isn’t being used well. And that’s not all, either. The longer inventory sits around, the harder it is to move it through the workflow process. This leads to higher production costs, delays in customer product delivery, and bottlenecks in production and supply chains. Thankfully, cloud-based MRP solutions can help companies avoid this. 

With an MRP platform, companies can ensure their production schedules are based on material availability instead of basing it on when orders come in, all without the hassle of an on-premises product. This helps minimize inventory levels and supports healthy, sustainable production processes that keep things moving. Additionally, an MRP provides users with easy-to-access data about material availability, location, size, orders, and more, which helps companies avoid excess items and optimize their work order management efforts.

2) Increase Production Forecasting

If a company wants to improve its production efficiency, it needs to know how much demand will be placed on a manufacturing process, when that demand will be there, and when business peaks and valleys will surface. An MRP system can address this by using past data sets (i.e., revenue cycles, seasonal influences, competitor sale trends, prior sales performance, etc.) to create predictive templates that help manufacturers reduce the risk of over or under-ordering supplies. The graph below—which illustrates data from a report conducted by the Department of Enterprise Engineering Operations—is just one example of how an MRP can help businesses achieve “an equilibrium between the production and sales operations.”

3) Better Productivity

There are few things more important in manufacturing than productivity. When productivity is down, processes are delayed, customers can grow unhappy, and revenue may drop. That’s why MRP solutions focus on helping manufacturers manage and set clear priorities that keep things on track. This means giving users all the build requirements to predict and plan for the machinery, labor, and workstations for every work order. These platforms can also eliminate manual tasks—like pulling sales histories, inventory levels, or Gantt charts—so users can spend more time managing valuable manufacturing processes.

4) Manage Production Plans

Creating a master production plan is one of the many things an MRP can do to help manufacturers maximize their productivity, efficiency, and revenue. For example, MRP makes it easy to keep everything in motion, ensuring businesses can avoid wasteful downtime, determine how much time and labor are needed to finish a project, create custom production plans, and ensure unexpected roadblocks don’t hold up processes. Better production plans can also help manufacturers improve their forward and backward scheduling, schedule workstation teams better, determine when resources and materials will be available, maintain exceptional product quality, and use operational metrics to create smarter decisions that generate better operating income.

5) Reduce Manufacturing Overheads

Manufacturing overhead costs are the indirect expenses—i.e., utilities, rent, and maintenance—necessary for the production process but don’t directly contribute to the product. As crucial as those expenses can be, failing to track and manage them properly can result in overspending, which limits a company’s ability to be agile and competitive in its market. An MRP can help mitigate those risks by considering internal and external factors like the supply chain, inventory levels, and customer demand to ensure everything runs smoothly. It essentially functions like a personal assistant who knows exactly what needs to happen, when it needs to happen, and what teams need to know to maintain their schedule.

6) Efficiently Manage Complex BOMs 

Bill of Material (BOM) management is an essential part of a manufacturing company’s workflow, but the more complex the BOM is, the harder it is to maintain. Once again, with the capabilities of a cloud-based MRP, companies can transform their BOM into an action strategy that describes the labor, equipment, and time required for their manufacturing processes. MRP solutions will consider all these aspects when giving users purchase recommendations, which can ensure planned tasks are performed without running out of components and guarantee that production is finished without leaving surplus stock.

Learn More About the Benefits of MRP Solutions Here