MRP - It's not just for make to order manufacturers...

Many folks associate MRP (Material Requirements Planning) with the traditional make to order manufacturing company. While it's quite useful for this type of company, it can be just as helpful in many other environments as well.

The Master Scheduling and MRP module in PBS Manufacturing allows users to plan to a forecast. This is where a company anticipates the sale of key products in a given time period and plans to produce these products to the shelf so they can ship them immediately upon a customer placing an order. At the very least, it allows you to have the material on hand to quickly assemble the finished goods as customers are placing orders, thereby reducing your overall leadtime dramatically.

While useful in a make to stock manufacturing company, companies who make to order or produce complex products designed to meet customer's specifications can't plan to a forecast. For companies like this, MRP can be used strictly as a demand planning tool. In other words, it can plan to actual customer demand. That means it can plan to specific customer or production orders without a forecast. This is where MRP becomes useful for companies who are classified as make to order companies.

How does this work? It's simple really, MRP takes into account all forms of demand; forecast, items ordered on sales orders, requirements for raw materials or subassemblies against shop orders, and even firm planned orders and safety stock levels you can define in an item master. It computes the overall demand for each item in the system, then compares this to the existing supply which may include items ordered on actual shop orders (production or work orders), open line items on existing purchase orders, and inventory on the shelf. Where it finds supply isn't meeting demand, it makes recommendations to you to aid you in determining what you need to order and when, in order to meet your production and shipping schedules. The bottom line is if you're not entering a sales forecast for finished goods, MRP can still see actual supply and actual demand and help you to make the two match.

Before you jump to the conclusion that MRP can't work for you, ask yourself a few questions:

1. Are you producing products with many assemblies or raw materials?

2. Do you struggle to have the materials you need when you need them?

3. Do you struggle to meet your scheduled ship dates on customer orders?

If you've answered yes to one or more of these questions then MRP may just be for you. Speak to your PBS Manufacturing Authorized Partner about the problems you're facing and find out if MRP may be able to help you better meet your customer's needs.