To manage stocks
Managing inventory stocks is one of the problems that manufacturing companies identify with the most: it often means having to make choices that reflect directly on the technical and production process as well as on the economic plan.
MRP: Availability Forecast
Storing materials is expensive and careful management is required to optimise their use in the production processes
Planning can be used to manage purchasing of raw materials and semi-finished materials needed for production, when they are actually required. It is a good idea to use this procedure every time the stocks or needs situation changes; in fact its purpose is to ensure that the right quantity of materials is available at the right time.
What, How much and When to produce and purchase?
Mago.net permits to answer to the three questions with the MRP procedure, that takes into account the constraint of minimising stocks.
Material Requirements Planning: MRP Wizard Options
In the MRP procedure a Wizard guides the user step by step, where possibly suggesting the most appropriate choices.
It can receive input of the situation of the progress of production underway, the situation of stocks, the market demand, the purchasing and production lead times and the sales projections, and it can output production orders and purchasing orders needed to satisfy the requirements.
Every company has different methods and needs in organising its production.
Material Requirements Planning: Input MRP
Planning involves analysing the gross need for each product, in other words the direct demand from outside. One could from a precompiled production plan, or by directly reading the customer orders acquired, the open orders and the projected sales.
On the other hand, the planning team may, at a given moment of the production cycle, need to know what purchases to make to complete the production currently underway without delays, and what are the most suitable dates for purchasing.
To respond to these needs, Mago.net MRP offers four different input options.
How it works
To launch an MRP analysis, it is necessary to use the specific Wizard that Mago.net provides the user. The procedure considers the raw materials to purchase the items to produce, respectively generating proposals for purchase and proposals for production orders.
The documents proposed can be analysed using the lists that the programme provides to be consolidated through the procedure to Confirm proposed orders.
To obtain significant results it is important to appropriately set the “MRP policy” on the items. Indeed, the result will be a lot different according to whether the management policy is “by need”, “by job order” or “by lot”. At the launch it is possible to deal with the net quantity calculation, the calendar days to exclude, any supplier loads to consider in advance.
In terms of output of a specific run of the procedure, the user can select what they are interested in: production orders only, purchase requests only or both.
After the processing is finished, specifically designed reports can be used to analyse the situation.
Planning basically means choosing from a number of alternatives; all potentially valid alternatives. This is why the MRP module makes it possible to keep a number of simulations in line at the same time, so they can be compared to each other before deciding which one best satisfies company productivity. All the simulations can be deleted after the choice is made.
Some companies prefer to deal with the different production lines separately. This modus operandi leads to having several in line simulations but they are not alternatives to each other. In a situation of this kind confirmation of the MRP proposals makes it possible to gradually confirm the single simulation without losing the others.
Make or Buy
During manufacturing planning phases, to fulfill material requirements, the MRP automatically proposes Manufacturing Orders and Purchase requests depending on the kind of the analyzed item (Manufacturing Orders in reference to Finished or Semi-finished items and Purchase requests in case of Purchase items).
In some cases distinction between items to be produced and items to be purchased may not be so clear. It may happen that items, usually produced by a company being purchased directly from suppliers and vice versa.
To meet this requirement has been implemented in Mago.net the Make or Buy management which allows, during Proposed Manufacturing Order confirmation, to choose whether to generate a Manufacturing Order or a Purchase Order.