How do you do Material Resource Planning?

Diana Vargas BernacheYureny Díaz GilesRaúl Ruiz Dávila

2° Partial- Entrepeneurship

Teacher Alberto Orihuela

Material Resource Planning… What is that?

The primary purpose of existence of a manufacturing organization is production. Any manufacturing organization deals with procuring the raw material, undertaking activities required to manufacture the product and delivering the finished product to the customers. All these activities are not as simple as they sound to be. It involves good amount of planning. This is where material resource planning comes into picture.

Material Resource Planning is a well-planned approach towards making the optimal use of the resources and inventory of the organization. It has ample scope in the manufacturing sector. Both effectiveness and efficiency matter in material resource planning as it is a matter of procuring the right items in the right quantities for the right kind of job to get the right output with time playing a crucial role in all the aspects. This meticulous planning of each and every aspect pertaining to the production of goods is what Material Resource Planning is all about.

Material Resource Planning… What is that?

But these so called simple processes involve cumbersome activities which need meticulous planning as in ‘what material to purchase’, ‘when to purchase’, ‘how much to purchase’, ‘how best the manufacturing process could be designed’, ‘what could the ideal inventory be’ etc., and there is no one solution for all the organizations.

The primary control focus of an MRP system is Order Entry. Once an order is entered (and it may be an internal order to build for stock), all the manufacturing functions are put into motion.

These include:

Cost Estimates - a function of Order Entry. Cost builds can be ordered from information in the other modules.

Order Entry - where the demand originates. Orders may be scheduled for periodic builds.

Inventory Control - do we have any of this stuff already built? How much?

Bill of Materials - what parts are needed to produce the product. BOM provides a complete multi-level build "blow down".

Purchasing - what parts called for by the BOM are in stock and which ones do we have to buy, and when do they have to be here.

Manufacturing Floor Control and Scheduling. Controlling allocation of personnel and resources.

Invoicing - where an order is transformed into an Invoice and shipping documents. Partial shipments and periodic shipments are allowed for, and will draw down the order quantity.

Example