Manufacturing – Material Requirements Planning

Posted on 17.08.2023 by Rik

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Abel software includes Material Requirements Planning (MRP) within its manufacturing feature set. MRP is an internationally recognized technique for calculating the materials and components needed to manufacture or supply a product.

MRP Budgets

Abel’s Material Requirements Planning uses budgets to drive Production Planning and Inventory Control. MRP can be used to plan manufacturing, purchasing and delivery activities.  It recommends re-order quantities and timing for materials, ensuring your supply and demand is efficiently managed while maintaining low inventory levels:  

  • MRP gives you certainty that you have all necessary components as MRP recommends re-order quantities and timing of components, labor loadings and machine times.
  • MRP helps you maintain low inventory levels by matching supply to time-based demand from the budgets. Order only what you need, when you need it.
  • MRP informs you about work group / work center utilization by using routing and labor data in Bills of Materials to forecast factory loadings.
  • MRP can help you build good relationships with your suppliers and customers. Using MRP recommendations, you can give your suppliers accurate forecasts of your purchases.
  • Abel’s MRP is for stocked items too. Though MRP is more commonly used to manage requirements for manufactured items, Abel’s MRP can also be used to manage inventory levels for stocked items.
Image shows the MRP Manufacturing Schedule for a manufacturing branch and the Requirements produced by the Material Requirements Planning Pegging proces
This example shows the Material Requirements Planning Manufacturing Schedule for a manufacturing branch and the Requirements produced by the MRP Pegging process.

Multi-Branch Material Requirements Planning

Abel’s MRP can also co-ordinate manufacturing and re-order processes across multiple companies and /or branches. In Abel, we call this “Gobal” MRP. It’s especially useful for businesses that have some centralized functions, for example: centralized raw materials purchase for multiple manufacturing branches or centralized manufacturing for multiple fulfillment branches.

Abel consultants can configure the system to suit your requirements. For example, for centralized raw materials purchase:

  • The reorder calculation includes demand from all branches configured to be part of the “global” reorder group.
  • Delivery Days for Global inventory can be set to allow for additional lead time (e.g. for shipping between branches).
  • “On Ships” is treated in the same way “Supplier On Order”, so the reorder calculations know what raw materials are ordered / inbound.
Image shows Material Requirements Planning Inventory Recorder settings configured for centralized raw materials purchase.
Material Requirements Planning: Inventory Reorder settings configured for centralized raw materials purchase.

Read about how MRP is helping Nautech Electronics to engineer a competitive edge.