Overview: Manufacturing Businesses and Material Requirements Planning Software
Today, businesses have become much more competitive, partly because of changing consumer demands, technological advancement, and the greater availability of resources.
Thanks to technological development and advanced digital solutions, businesses can now utilize specialized tools to reach their full potential. Manufacturing businesses, in particular, use several tools to stay ahead of the competition.
One such tool is Manufacturing Resource Planning (MRP) software.
These business tools come with extensive features such as ERP (enterprise resource planning) solutions and much more, which prove to be highly beneficial for enterprises.
The tools are widely adopted today because they streamline business processes, ensuring production is not hindered due to inadequate resources.
For someone with little experience, operating MRP software could turn out to be quite daunting, because of the complex features that the software shows off.
Consequently, this could prevent business owners from taking full advantage of MRPs and taking their business to the next level.
In the end, they might end up missing out on some of the vital features that they have could used to thrive and reach new heights.
What is Material Requirements Planning Software?
Let’s start with the basics: What is MRP?
Inventory management and planning are something most manufacturing businesses struggle with.
The primary purpose of using MRP systems as a business strategy is to track what is required, quantity, and time.
In the olden days, inventory tracking was done manually by recording and writing down the variations in the stock. The process was mostly manual.
MRPs were introduced much later. The use of this system minimizes the risk of human error and eliminates the need for manual labor. This in turn cuts down costs.
Despite its benefits, several businesses use pencil and paper to calculate and note down inventory levels.
The main aim of MRPs is to ensure adequate raw material is available to cater to production demand.
This allows companies to be able to produce exactly what’s needed and with maximum efficiency.
The software also monitors other business processes including production scheduling, purchasing, budgets, and much more!
History and Introduction of MRPs
Did you know that MRPs first emerged almost 50 years ago?
Joseph Orlicky introduced the ideology, and Black & Decker was the first manufacturing company to utilize the methodology for its manufacturing processes.
Eventually, the popularity of the methodology grew to the extent that in 1981, about 8000 companies were implementing the idealogy to maximize efficiency levels in production.
Because it was so widely accepted, several versions of the MRP system emerged in the tech sector.
Later, in 1983, the second version of the original manufacturing resource planning (MRP II) was introduced by Oliver Wright.
It was an advanced version of its predecessor featuring additional data on business processes including the finance and accounts sectors.
Today, the software known to us as an ERP (Enterprise Resource Planning Software) was initially just another version of an MRP.
Introduced in the 1990s, ERPs showed off a plethora of enterprise-related features developed to assist enterprises with automated tasks.
An ERP software offers inventory and stock management features and shipping, acquisition, and product costing functionalities like an MRP. The software also assists with payroll management and much more!
MRP Software vs. ERP Software
Currently, the two inventory management systems that dominate the manufacturing sector are: ERP (Enterprise Resource Planning systems) and MRPs (Material requirements planning strategies).
Both inventory management systems show off a host of different features that make them different in terms of functionality.
An MRP system focuses on increasing inventory efficiency while ERPs automate various business processes.
The MRP system controls the manufacturing, production scheduling, as well as purchasing of a business.
On the other hand, an ERP supports not only manufacturing, but also supply chain, financial management, sales management, and planning.
Consequently, both systems are bound to have very different users. However, some MRP software offers ERP capabilities within one system, while others may allow business owners to integrate an ERP into the system.
In other words, an MRP is an independent system, while an ERP offers multiple features on a single system through integration. A business might not need an ERP, but an MRP system is essential for manufacturers.
MRP systems also allow business owners to combine them with other inventory software, while ERP systems do not.
Most businesses end up using MRP systems rather an ERPs to facilitate their business.
Why Use MRP Systems?
The implementation of MRPs is highly beneficial for businesses. MRPs not only minimize expenses and increase productivity but also enhance customer support.
MRP systems benefit the business in several ways:
Efficient Inventory Tracking:
Inventory tracking is an integral part of a manufacturing business. Being aware of what is needed, when, and how much quantity can save the company from losses.
Inefficiency inventory tracking could be because of excess stock in the inventory, which is a waste of valuable capital, or inadequate supply in the inventory, which could delay production.
MRPs are designed to cater to this problem and record any fluctuations in the inventory.
Improved Resource Allocation:
Since MRP inventory provides valuable insights to the business owner on how much stock is required and when the owner can plan how much they will allocate to purchase more stock.
It also allows business owners to estimate labor costs, capital (including equipment), and the time required for a specific production process.
Excessive stock in the inventory means precious resources are wasted, including money to buy the stock and the costs of storing it in the inventory.
Luckily, with an MRP, the risk of reduced waste is reduced thanks to the timely updates on the fluctuations in the inventory.
Another factor that reduces waste is the storage of documentation on digital platforms, which reduces paperwork expenses.
Since every piece entering and exiting the inventory is tracked, an MRP provides regular updates on when the stock needs to be acquired.
This allows business owners to plan their budgets accordingly, ensuring production is not affected.
Additionally, some MRPs feature CRM (customer relations management features) combined with ERP system capabilities, meaning all customer-related problems and financial issues are dealt with in an organized manner.
Best MRP Software of 2021
In today’s market, a plethora of MRP solutions is available to manufacturing businesses. Among the 20 Best MRP Software of 2021, the most popular ones are Fishbowl Inventory, IQMS, and SAP Cloud ERP.
Let’s take a look at some of the best ones recommended by software analysts:
Featuring a plethora of Demand Planning abilities, NetSuite is a robust accounting and integration software.
The cloud-based software solution monitors several business processes such as inventory management and fulfillment, financial management, and more!
The best part is, it has been designed for companies of every size and can be used on numerous platforms, including Mac, Windows, and even Linux.
Since it is cloud-based, the system is highly scalable, making it an ideal choice for advanced planning throughout the entire manufacturing process.
At its core, NetSuite is an ERP solution, but considering its vast capabilities and multitude of features, it is evident that it has been constructed specifically for the manufacturing sector.
It allows users to track inventory control as well as safety lock levels. Plus, it also conducts supply planning before sales orders are generated.
- Fishbowl Inventory
Fishbowl Inventory can be used both on-site and through the cloud. The inventory solution manages the inventory and MRP supply chain, accompanied by MRP software and various tools.
Fishbowl is a commonly used solution by enterprises because of its low price and high scalability.
It is designed for use by small, medium, and large-scale manufacturers.
The system is well known for its reporting features, including inventory records file reporting. This improves MRP planning throughout the production process and enhances reporting.
To boost functionality, the system allows several integrations such as QuickBooks integration, Xero, CRM, EDI, work order management, and much more!
Initially, the system was an inventory management platform that provided accurate inventory counts and keeps the inventory updated at all times.
Since the business owners receive timely inventory updates, improved inventory control, capacity planning, and improved supply chain management are just some of the perks offered by Fishbowl inventory.
The cloud solution can be used on-premise and in either a public or a private cloud.
IQMS is an enterprise resource planning solution, but thanks to its advanced capabilities and competitive MRP software system, the solution facilitates manufacturing businesses to a great extent.
Featuring manufacturing tools in addition to demand forecasting capabilities, the comprehensive MRP system focuses on providing support to the larger manufacturing companies.
The MRP software is known for its synchronization with BOMs (manufacturer bills of material).
This is done through the data uploaded by shop floor workers.
It can be used for not just updating requirements for raw materials but also scheduling production.
Most small businesses prefer JobBoss as a manufacturing ERP software. Although it needs to be customized if one wants to unlock its full potential, once your business and the platform connect, there is no stopping you from reaching new heights!
It is famous for its features, including favorite workflow shortcuts and Shop Alerts, that keep the manufacturing process smooth by sending automated messages to the necessary people.
The system allows its users to customize the alerts sent, sending them emails, text messages, or even internal messages.
JobBoss has recently announced its upcoming project, JobBOSS2. This platform will be independent of JobBoss and show off robust features accompanied by an application that offers scheduling tracking and real-time production.
Featuring a plethora of features, from CRM to sales to HR, Odoo is a robust MRP solution used by several manufacturing businesses today.
Thanks to its features, such as Gantt charts and Kanban boards, companies can now sort their workflows in an orderly manner.
Plus, the demand prediction capabilities that offer intelligent forecasts allow businesses to cater to production needs effectively.
Odoo is not very popular because of learning community documents. However, the platform is taking steps to resolve these problems.
The platform is widely used because of its advanced features including, inventory requirement and management, material requirements, and maintenance requests.
The demand forecasts, combined with a master production schedule tool, allow you to plan production efficiently.
- SAP Cloud ERP
SAP Cloud ERP contains an MRP, and just like its name suggests, it is a cloud-based system.
The software developers updated the platform within three months and added more features to its online help library.
This means, when a newcomer operates the system, the comprehensive documents provide an extensive guide on using the software.
The MRP pricing is relatively high if enterprise-sized companies, but considering the level of customization offered by the system, it is certainly worth considering.
Its dependent demand tables allow its users to observe dependent demand for raw materials and parts.
This makes it a strong MRP since it offers valuable insights on material requirements, keeping users updated with inventory levels so that production schedules remain uninterrupted and production takes place with maximum efficiency.
Designed specifically for process manufacturing, the system features advanced inventory management, quality management, safety reports, material planning, and much more!
Although the system does not offer much customization flexibility, it is still an exceptional MRP considering its advanced material planning capabilities.
What to Look for in an MRP System?
When choosing an MRP, it is crucial to look for a system that equips your business with features that handle every aspect of the manufacturing process.
It allows manufacturing businesses to plan how each resource will be used and stay organized.
Some features that you need to look for when choosing an MRP system for your business are listed below:
ERPs provide a host of different features to users that facilitate business processes.
For those in search of MRP systems, and Enterprise Resource Planning capability is foundational because it records the essential business processes. Whether it is production or distribution, ERP system capabilities have got you covered!
At its core, an ERP system is based on a database management system designed to keep track of factors, including inventory, materials, production schedules, budgets, and even cash flow.
When looking for an MRP system, don’t forget to check if an ERP feature is included or if the system allows integration with an ERP system because efficiency will be difficult to achieve without it.
- Accounting and Financial Management:
MRP systems provide regular updates on the supply, inventory, and materials that need to be purchased, but in some cases, it comes equipped with financial management tools.
These accounting and financial management tools allow business owners to plan budgets and ensure their allocation, spending, and revenues remain on track.
Some of the most advanced MRPs help businesses keep their allocation and production costs at a minimum while ensuring their efficiency levels stay at the maximum.
- CRM (Customer Relationship Management):
Contrary to popular belief, ERPs and CRMs are not the same, although the two terms are often misused interchangeably.
CRMs or Customer Relationship management tools are designed to aid salespeople while they deal with clients. This could be at any stage of the production process.
These tools are ideal for businesses with a large customer base to cater to since CRMs handle customer-related problems automatically and keep the business organized.
Most MRPs feature built-in CRMs, but a third-party CRM platform can be integrated into the system if that is not the case.
Although not all businesses give importance to forecasts, they can be beneficial for business owners who wish to analyze the growth of their business over time.
This is because forecasting anticipates the demand for the business’s sales, products, and materials allowing the business owner to observe the frequency of sales they make.
Forecasting gives businesses a competitive advantage in the industry since they can track the emergence of trends.
In some cases, MRPs feature a forecasting feature and a reporting capability that produces prediction reports, charts, and graphs for the company to analyze.
Running a manufacturing business is not as easy as it seems! Inventory management, budgeting, and a lot more go into streamlining the business processes.
Plus, business owners need to ensure resources are brought on time and in the correct quantity so that the products are not affected adversely.
Luckily, MRP systems are the best solution to all manufacturing-related problems. From inventory management to financial management, MRPs are the most effective technique to streamline a manufacturing business.
MRPs constantly undergo development as technology, and business needs change. This means a sound MRP system will grow as your business expands, facilitating several business processes and making the lives of business owners easier.