Material Requirements Planning (MRP)
Material Requirements Planning (MRP) refers to the materials required for the production of products in the planning period. The type, quantity, quality and procurement costs of the individual materials are taken into account and are usually determined and controlled using special MRP software.
Material Requirements Planning, also known as MRP, aims to achieve a cost-optimized but seamless supply of materials. It is therefore essential for production that only as much material is available(replenishment) and processed as is required in the specified period. If a company achieves the latter almost 100 percent, it is referred to as lean production: the core principle of lean production is the avoidance of all waste.
Material requirements planning: continuous observation of the market is essential
In material requirements planning, the requirement dates (time factor / procurement effort) are also determined taking into account the respective conditions on the procurement markets. In practice, rare materials in particular, such as metals from rare earths, which are laboriously extracted from different depths of the earth for the manufacture of electrical appliances, are finite and therefore expensive. In addition, raw materials are often subject to international and national laws and specific guidelines. Constant market monitoring by a production manager is therefore essential.
Due to the different circumstances in the company and the challenges in material procurement, there are different planning procedures or approaches for material requirements planning in order to complete the respective task in a customer-oriented manner. They differ fundamentally in the type and nature of the respective production order and describe the production-specific decision-making and action requirements in the company and are usually based on special IT systems(PPS systems).
Criticism: Since most active planning processes and the PPS systems developed on the basis of them are based on the analog idea from 1970, their use is rather suboptimal but still common practice. Even the newly developed IT systems are often based on the static conditions of the market at that time. Today’s market situation, on the other hand, is much more dynamic and requires dynamic reaction times – less time-consuming planning processes – due to the extent and speed of changes in the market. This is one reason why the Advanced Planning System (APS) was developed and published in 2000. This is not a rigid MRP system, but rather individual modules that can be linked together as required.
MRP systems require the following key data/indicators:
- Structure of the available product data, its accuracy / details – including notification
- Scope of the order / customer requirements
- Complexity of production / which machines are available, which are defective?
The following questions are important for Material Requirements Planning:
- When are the materials actually needed?
- How is replenishment regulated by means of extra logistics? Who is the contact person/foreign correspondent?
- Do materials require a fixed order lead time? Do they have to be obtained at great expense, for example?
- What costs are incurred?
- Do any legal formalities need to be clarified in advance – or afterwards?
Further information on this topic can also be found under Information in intralogistics and under the lean method Heijunka.
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