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Introduction to MRP (Manufacturing Resource Planning)

MRP or Manufacturing Resource Planning - Image showing car manufacturing warehouse
Steven Carrie

By Steven Carrie Business Solutions Consultant, Updated 18 May 2017

Manufacturing Resource Planning (MRP) software is aimed at bringing together a whole range of business operations into a single, one-stop solution in order to streamline the running of the entire manufacturing process from raw materials to finished product.

Covering everything from estimating to scheduling and purchasing to shipping it can also feed into customer management and accounting systems to provide an overview of the entire business. This offers significant benefits for management, because with accurate, up to date, information about the business it is possible to make better decisions and respond more rapidly to problems or changes in the market.

MRP features

There are many different MRP packages available, so it’s important to identify the features that are most important to your business. There are some features that are found across all packages. These include: production control, cost reporting, scheduling, capacity planning, bills of materials, and inventory control. These are the core elements of any MRP system.

Other modules you may find include: sales analysis, tool management, change control, estimating, accounts payable and purchase ledger, and warehouse management. You need to decide on the modules you’ll require at the outset. Other parts of the software can, of course, be added later as the business expands.

MRP Business issues

Finding the MRP system that is right for your business involves a number of different criteria. These include the type of business, the scale of your operation and your plans for future growth. You need to take all of these into account in selecting a package.

Large companies can spend many thousands of pounds on an MRP system and take months to integrate it into their organisation. They can also afford to have a dedicated team of people to implement and look after the software, a luxury which smaller organisations are denied.

Smaller businesses will need to seek out cheaper and more flexible solutions that are easier to implement and can be maintained by a smaller number of people. In terms of solutions, however, they’re looking for many of the same things as their larger counterparts. Ease of use, therefore, is key.

The nature of your industry will often have a significant impact on your software choice. In certain areas, food manufacturing or pharmaceuticals, for example, there may need to be a high level of traceability throughout the production process. The right MRP system can provide this so that the whole operation can be traced through from raw materials to finished product with documentation at every stage. Other businesses may simply take a few raw materials and use some machinery to turn them into products. In these cases, there may be no requirement for a detailed materials planning solution or for traceability.

Staying in control

An MRP system is about staying in control of your business. It needs to be easy to use, because if it isn’t it won’t be updated as it should be and errors will creep into the process which will negate the advantages of the software.

Properly implemented, user friendly systems will ensure that everyone, at all levels of the organisation understands what they need to do. This, in turn, will keep the whole operation on track.

If you have existing systems for accounting, payroll and other back office functions, you will need to ensure that the MRP system you choose is able to integrate with these and exchange data with them. You can, of course, look at replacing these over time and introducing a fully integrated system. However, few smaller organisations will relish the upheaval of changing the entire business as they implement an MRP solution.

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