How can you use MRP to increase production capacity?

Material Requirements Planning (MRP) is a system that helps organizations manage and plan their production processes by ensuring that materials are available when needed for production. While MRP itself is not designed specifically to increase production capacity, it can play a crucial role in optimizing production processes and enhancing overall efficiency, which can indirectly contribute to capacity improvement.

MRP best fits to the Make to Stock products like Fast Moving Consumer Goods (FMCG). Since the finished goods do not vary and have a fixed recipe/ BOM. The accuracy for the BOM is one of the crucial things to check. A single level BOM is much easier to manage than a multilevel BOM.

BOM inventory levels are critical to maintain a good MRP environment there is a fine line between too much and not enough inventory. Lead time is a big part of inventory levels and control.

Although MRP runs on input from users/power users, it governs itself and provides a disciplined output to manage material resources, minimizing the need to micromanage planning of materials.

To get the maximums of the MRP, we need defined clear strategy to management the supply chain process, assure high level of maturity in material master, construct a clear definition of product structure for elaborate the BOM and the most important: development a team compose by professional with deep knowledge about the MRP, management properly all tasks and exception messages.

Being a part of three MRP systems implementation, I can surely say that MRP implementation is not as smooth as it looks. Vetting a system that works for your organization, more so it’s offering right out of the box, are key in determining which MRP to choose. I have seen great speeches about MRP systems which offered very little out of the box, and then we struggled to get all the pieces together which delayed module implementation.

We should look at the possibility of leveraging real-time data feeds and Internet of Things (IoT) technologies that would facilitate immediate updates on inventory levels, production status, and supplier information. This capability enhances the speed of decision-making and enables swift responsiveness to shifts in demand or disruptions in the supply chain.

Actually some areas MRP will take place some adjustments in stock due to Masture production plan changes .we need adjust manually reservation adjustments and inventory material flow .hence these changes will effect smooth workflow. Other things MRP will create automatic purchase order and it may order less than minimum qty which will effect cost of the product.

MRP is beneficial to an organization in various of ways. If used correctly, it ensures we have the correct inputs needed for production in correct times. we can match our demands to the inputs, and this aids the production to be smooth, reduces the risk of write offs, or having to keep too much inventory in the process. it ensures that we can just-in-time inputs when needed in production. It also helps keeping healthy stock levels and enables one to keep DIH in check. Any OOS can be seen in advance and mitigating processes initiated. The challenge of MRP is human element, the maintenance of parameters; MPS, BOMS, safety stocks, MPQs, MOQs, Forecasts, MIPs, all these have to be defined and the accuracy of MRP depends on accuracy of the data.

While MRP simplifies production and inventory management and has many benefits, its performance must be maximized by resolving issues with data quality, implementation complexity, and change adaptability. MRP's shortcomings can also be partially addressed by integrating it with other approaches like Lean or JIT (Just-in-Time).

Sales & Operations Planning (S&OP) is one of the main driving forces to improve performance. It ensures supply planning matching demand planning. When we have forecast accuracy, we can have accurate Manufacturing Resources Planning MRPII, MPS and followed by MRP everything in a chain effect.

We should look at the opportunity of incorporating advanced predictive analytics and machine learning algorithms to enhance the precision of forecasting material requirements. This process may require analysis of historical data, market trends, and other pertinent factors to anticipate future demand and optimize inventory levels more effectively.

Some things to consider Many ERP tools are created to make your business more effective and efficient; don't try to rebuild what you already have. "Because we have always done it that way" is not a reason to customize or implement change. Don't fool yourself into thinking you will be able to make one click and get all the magic you do in your highly manipulated Excel file. Please be honest about what data is critical to run the business and make sure those are the report functions you focus on. To create buy-in, find your early adopter, or the person most against the change, and work with them to show the benefits, and they can then become your champion for success.

A MRP system is critical in a manufacturing environment. The valance in being able to get the most out of the system is to ensure that your BOM’s are accurate and your stock is correctly counted on the system. If either is out your are wasting your time trying to implement the MRP system. All this has to be in place to gain the full benefit.