Materials planning or MRP is a system used by companies for administration and planning, usually associated with software that does it. What this program does is plan production and control the Inventory, which benefits companies enormously. Its objective is that the company has all the necessary supplies, or materials required at the right time to meet the needs of customers.
The MRP can provide a list of purchase order suggestions to SuppliersYes, it is necessary to program it to do so. But it is not your only objective, you also have to secure materials and products so that they are available for production and of course, for delivery to customers. He is also in charge of maintaining adequate inventory levels for the operation, and planning manufacturing activities, delivery schedules, and purchasing activities.
The MRP is a very complete and beneficial system for companies, and it must satisfy a series of conditions: ensure that the products and materials requested for production are distributed to customers; keeping inventory to a minimum and planning activities such as manufacturing, deliveries and purchases. But the MRP system is only acceptable where there are particular conditions. For example, when the final product is complex and requires several levels of preparation. Or when the final product is expensive, that the processing time of the material and component is quite long, that the product production cycle (lead time) is long, or if the process is characterized by items with dependent demands and manufacturing be intermittent.
The objective of this system is to decrease the volume of stocks at the time the purchase or manufacturing order enters.