What is MRP and ERP?

The manufacturing industry has specific supply and production needs. In this article, you will learn about the main material needs of the manufacturing industry and how to work better with an integrated ERP solution.

What is MRP?

Material or production requirements planning (MRP) is one of the key processes in manufacturing industries. Modern MRP solutions can help manufacturing firms to automate and streamline key activities. But what is MRP and how can these systems benefit growing manufacturing firms? Firstly, let's take a look at what's included in an MRP system.

Required Materials

The first step is knowing what materials are going to be used within your products. This will have to be considered taking into account all the components of the goods used in the production cycle. It's important to remember that production processes often rely on multiple raw materials.

At this point, the "what" must be clearly defined, even if you can change suppliers later if necessary. The "what" is also related to the cost of each raw material.

Manufacturing Goods

Knowing what goods are going to be manufactured and how is equally essential. This is, after all, the core business of any manufacturing company, which is why it must be well-defined. This is crucial to getting the whole production process going and knowing what is needed.

It goes without saying that in a changing industry, this is an important aspect. Nowadays, in many cases, quality takes priority over quantity, which means manufacturing small, high-value quantities.

Sourcing Materials

The right time to order the materials, in relation to the storage capacities, will depend on several factors. First, on the type of material, whether it is perishable or not. The second important issue is market demand, depending on whether there is seasonality. And finally, if there is a special offer that warrants buying in bulk.

The timing of the request or orders is relevant. And it is precisely this reason that makes it an essential part of any manufacturing industry planning process.

MRP and ERP

If you select a really powerful ERP solution it is likely to include integrated MRP functionality. There may also be basic ERP solutions that offer MRP bolt-ons or third-party integrations. However, to avoid any data duplication or integration issues, it's always advised to use a single, centralised solution, such as SAP Business One.

SAP Business One MRP Module

SAP Business One is an affordable and scalable ERP solution that can be used for different manufacturing and production processes - alongside managing the rest of your business.

The software can calculate, in exact detail, the cost of the different manufacturing components and any waste generated. As a result, it is much easier to do calculations on manufacturing costs and comparisons between certain suppliers.

Manufacturing improvements

With a SAP Business One manufacturing solution you'll enjoy the following advantages:

• Optimise production resources by reducing superfluous expenses
• Improved product life cycle management
• Accurate production times
• Real-time, accurate production data
• Optimised inventory

Why SAP Business One

SAP Business One is the ideal ERP for manufacturing companies. It's already used across a variety of manufacturing industries to help:

• Improve production processes with traceability controls to increase outputs
• Increase levels of customer satisfaction with accurate delivery dates
• Digitally track the inward and outward movements of goods, as well as the location of the goods
• Manage your finances in real-time
• Track real-time production data with a suite of managerial reports or dashboards

Production Planning

Planning in the manufacturing industry is much easier if you use specific solution like SAP Business One. Knowing what the cost is and what you save with your production processes is essential for any company looking to make a profit. When you've also got an integrated solution that helps to meet industry guidelines or compliances, provides greater traceability on goods and helps to optimise resources, you've got the perfect tool for your manufacturing business.