Must Have Material Requirements Planning (MRP) Controls

Material requirements planning (MRP) is an important system to have in place within a manufacturing environment. With pressure coming from several different directions, having the right system in place helps to assert control over various elements on your production floor enabling you to satisfy all demands.

An effective material requirements planning (MRP) system should track all current on-demand and in-transit inventory records for every component of a product that you produce. It should also track the necessary labor required for the building of each component, as well as the bill of materials that tracks the components of each item to be produced. The result should be a production and staffing schedule that accounts for all limitations and creates purchase orders for every material required throughout the process.

The system should be completely automated so that your job is not focused on these processes, but on the information put into your material requirements planning (MRP) and the outcomes. As a result, it is imperative that all information that goes into your material requirements planning (MRP) solution is accurate so that the end result produced is the end result expected. The automated nature of your material requirements planning (MRP) makes it that much easier to establish the controls you need.

Inventory Accuracy in Material Requirements Planning (MRP)

The material requirements planning (MRP) system you have in place – no matter how robust – can only perform as well as the information it is given. Establish an expectation for the level of accuracy you must have in order to produce the results you want. You also need to have controls in place over the location of each item, and all the information you need to have ready to input into the system, including description, part numbers, unit of measure, etc.

You know how critical your bill of materials are to producing the right results on the production floor. You must be able to accurately determine the value of inventory, as it is moving through the process. Whether the materials are still sitting on the floor, are halfway through production or have been turned into finished goods, you must have a high expectancy on the accuracy of your material record. Itemize these bills and compare them regularly to ensure they are meeting and maintaining your expected level of accuracy. This type of due diligence will ensure your material requirements planning (MRP) system will produce the results you need when reporting to those writing the checks.

Process for Identifying and Resolving Variances in Material Requirements Planning (MRP)

Even with specific controls in place, you will still have variances that occur, especially where human error can come into play. The material requirements planning (MRP) system will prevent many of those errors, but you will find that some will still make their way into the system. Invoices may be produced wrong on the vendor side, counts may be off when taken manually, charge backs to the warehouse may be entered incorrectly, etc. Be sure to have a process in place that ties in with your material requirements planning (MRP) to track, identify and resolve any variances that can affect your overall accuracy and outcomes. As you will be judged by your superiors based on bottom-line results, maintain control of your outcomes by identifying those things that deserve your time and attention. A material requirements planning (MRP) solution is a great tool, but choosing MRP Systems can be a complex process, and without the right features, it too can create problems.