No matter the industry, a company’s success can greatly depend on efficient and accurate management of inventory and production schedules. A tool that all companies should consider helping manage their inventory and production schedules is a Material Requirements Planning (MRP) system. Here at ORBIS, we have the knowledge and expertise to help get your company utilizing MRP within SAP’s Material Management module effectively to allow your company to reap the benefits of a properly planned and implemented MRP strategy. Let’s outline how SAP’s MRP can help manage inventory, production planning, and procurement.
Demand Forecasting: SAP’s MRP will conduct a demand analysis based on current inventory, sales orders, and production plans coupled with historical data to schedule the timing of materials to efficiently meet production and customer needs.
Bill of Materials (BOM) Management: BOMs are a list of components and raw materials needed to manufacture a product. SAP gives a company a host of tools to effectively manage their BOMs. Accurate BOMs are of paramount importance to help MRP correctly analyze what is needed when forecasting.
Inventory Management: SAP’s MRP can help plan inventory levels, so materials are always at the optimum level. It utilizes information stored in the material master such as lead times, safety stock, etc. to calculate proper inventory levels and when to reorder materials.
Production Planning and Scheduling: Production plans and schedules are generated by MRP utilizing demand forecasts and BOM’s to ensure production is in line with customer needs while minimizing production idle time.
Procurement and Purchasing: Within SAP, MRP considers current inventory levels, demand forecasts, lead times, and safety stock levels to produce procurement recommendations that align with the overall production plan and schedule. It should be stressed that a production environment is not required to implement MRP. MRP can be used to maintain optimum stocking levels of items to be sold. In this instance MRP would consider forecasts, historical data, current stocking levels and stocking parameters to issue purchase requisitions to keep the proper amount of inventory on hand.
Here at ORBIS, we can integrate MRP into your existing SAP ERP to allow your company to realize the benefits of MRP within SAP. These benefits include improved efficiency through automation, optimized inventory levels, and enhanced customer service. In the end, the cost savings will outweigh the investment by helping minimize waste and reducing operational costs.
