Inventory control
Inventory management is crucial to realizing manufacturing efficiency. MRP systems work with data from the production schedule to determine the exact level and cost of inventory required to meet the demand. MRP systems maintain an optimum inventory level of both parts and materials, reducing the inventory carrying costs.
Purchase planning
Streamlining the production process is also heavily dependent on knowing what is available, what to buy and when to buy. Purchase planning requires a smart system to track the production steps and identify any needed purchases while counter-checking with the production schedule and expected material deliveries.
Production planning
MRP systems detect bottlenecks in the production line caused by scarcity or a reduction of material. When this happens, the system can reroute production or recommend a reroute to the production of a different product where materials are available. MRPs can also focus efforts in a particular production stage at the expense of another stage deficient of raw materials and parts.
Work scheduling
Work scheduling manages active production time, predicting the expected yield and the adherence to the production schedule. MRPs paint the larger picture of the production process using the available inventory. Managers' can use this information to control hourly operations, equipment and labor tasks, and even accurately predict labor time and operational costs.
Resource management
Raw materials are the lifeblood of any manufacturing process. Having control and ready information about the raw materials' availability and expected yield also gives the manufacturer an idea of other resources to engage in the process. Efficiency here is key. Information from the MRP system tells the manufacturer what equipment is required at what time and when extra labor is needed, as well as whether to hire or buy operational assets.
Data management and documentation
Manufacturing involves the generation, analysis and presentation of a tremendous amount of data. MRP systems assist manufacturers in handling this information. MRPs process and document purchase data, inventory data, deliveries and cash flow data into receipts, invoices, lists, reports, and other easily structured presentations.
Economic purchasing
The system takes into account the quantity and cost of materials needed - including the cost of shipping, storage, and carrying - to come up with the most economically viable purchase to satisfy demand. MRP systems economically optimize purchases with high precision, saving the manufacturer the cost of unnecessary purchases.
Time Saving
MRP systems are fully automated and require little human intervention. This saves a great deal of labor time otherwise used to do inventory, purchases, and production management. The level of accuracy in these systems is far beyond any error-prone human method. It also manages and stores production data, which eliminates the need for entire departments.