The MRP system is an essential tool that every company should have. Today, there are countless vendors of MRP software for small manufacturers, at a convenient cost.
From tracking materials throughout the supply chain to managing personnel or cash flows, MRP software offers advantages when implemented in your small manufacturing business.
Let’s see how your small business gets improvements and reduces operational costs by implementing a MRP software.
- It facilitates the integration of your organization and with external partners.
- Manage real-time data.
- Your administration users will optimize their administrative tasks.
- You will optimize the use of your materials.
- You get security in the handling of your data.
Let’s see in more detail each of the benefits:
Integration of the functions of the organization
MRP systems ease the integration of your team members as well as with your key partners. Every business can be seen as a set of interrelated processes, even when there are departments. This concept can be extended downstream to suppliers of your suppliers and upstream to the final customer.
When you integrate your business functions, you achieve:
- A quick access to information. For example, getting inventories data and salespeople can create quotes to their customers.
- An observation upstream and downstream of the supply chain planning area. This means that you can visualize how the raw material arrives to the company, or the final product arrives on time to the final customer. You also can plan ahead, based on demand visibility. Thus, the production plans tend to be more precise.
- Planning ahead of any needs to increase your plant capacity, seasonally or permanently. It gives you the chance to take the necessary measures to avoid loss of sales.
- Monitoring your stock availabilities and take faster response when required.
- Your buyers will be able to adjust purchasing volumes according to changes in demand and / or inventory levels.
You may also find useful article about how to choose an MRP system for my manufacturing business.
Manage real-time data
Time is a crucial factor in meeting your customers’ expectations. If your manufacturing business is not present when your customers need it, they will buy from other competitors.
Imagine that you need to provide a quote for a custom-made product. To do so, you need to collect information on production times, the amount of material you need and the amount of required labor. Making this calculation manually takes too long. Often you need to provide quotations to many clients. The information in real-time allows obtaining product costs based on algorithms that the MRP software already has. It is only necessary to add the necessary mark-up to the total cost or to ensure your sales are profitable based on market price.
Thanks to real-time information management, you are capable of:
- Monitoring sales volumes by region, product types or feature.
- Better forecasting and business planning.
- Tracking your raw materials coming from the supplier to your factory. This involves material in transit, reception, production, picking, packing, storage or delivering.
- Tracking the finished product to your customer or distribution centers.
- Monitoring your production programs, the running machinery and the production rates.
- Tracking your payments, cash returns, and financial flow.
- Faster response against changes over the supply chain (demand, material, etc).
- When integrated with your key partners, they can view your available inventory. This means increase your sales and lower your inventory days of supply.
- When integrated with your key suppliers, they can track unexpected changes in customer’s demand and take proactive action.
Your administration users will optimize their administrative tasks
Human resources are scarce resources and their time is limited. You need to get the highest performance and find solutions to optimize their tasks. MRP software is a tool that covers this need.
Visibility, process integration, and real-time data management make MRP software a true ally. Your employees will focus on adding value to the product and reduce wasting time. Your staff will focus on value-added activities. They will make communication between areas effective, without superfluity. They no longer need to go to another corner of the factory to check the information they need.
One of the key points when it comes to optimizing administrative tasks refers to planning and scheduling. The MRP software provides simple tools to plan processes in the short, middle and long term. These processes are material, labor, cash, demand or capacity, among others.
The immediate benefits are the detection of bottlenecks and help to streamline the processes. MRP software triggers notifications every time reaches certain events. For example, when the SKU reaches the reorder point or when there is the automatic activation of a work order.
You will optimize the use of your materials
You may need to know how much material you have on hand or where the material is. Or you may need to know if the last truck loaded the finished goods your customer is waiting for.
MRP systems allow you to solve all these problems. By implementing such software, you will be able to monitor, track, anticipate, replenish and check:
- Raw materials
- Finished goods
- Other supplies
In sum, MRP software allows you to optimize your materials management. You will manage your inventories in a simpler, faster and more precise way, with fewer safety stocks.
You get security in the handling of your data
MRP software gives you security in the management of information of your manufacturing company. The implementation of an MRP software requires an investment of time, money and human resources. You must ensure a positive return on investment.
- MRP software gives you the ability to install it in the cloud, without any need to invest in infrastructure or provide a physical server.
- The software by subscription or SaaS, offers accessible fees for small manufacturing business. Version updates are included at no additional cost.
- You reduce the costs related to information technology and related personnel.
- In general, the MRP software is user friendly and intuitive. They also provide user support with tutorials or dedicated customer support services.
- The users can connect to the MRP system, not only from their terminal, but also from a tablet or a cell phone.
- The information is protected and prevents access by undesired third parties.