Throughout this blog post we will explain why it is necessary to use an MRP in manufacturing companies, the functions of a MRP and some of its benefits.
Many companies base their success on sales, however there are other areas that are highly relevant, and it is important to give them the attention they require, since they make the organization and performance improve, one of them is the planning of the materials that will be needed in the production process. This practice helps growth in income and reduction in costs, and is well known that good financial health depends largely on these two aspects being well controlled.
Having good management in production planning will lead your company to reduce costs, improve the speed of deliveries and take control over wastage. A very effective tool to achieve these goals is an MRP.
MRP by its acronym means Material Requirements Planning, its main function is to manage the production processes of companies, helping to maintain a good level of inventory and planning activities throughout the process, both in purchasing, manufacturing and product delivery. It also controls logistics in the supply chain, in aspects such as:
The list of raw materials and quantities that are needed.
The rotation of the product within the warehouse and the period of time that it will be there.
The transformation process from raw material to final product.
All this in order to ensure the lowest possible cost in each step, ensuring customer satisfaction at the time of product delivery.
Functions
An MRP helps you plan your bill of materials according to the amount of product to be produced.
We share a simple example, using the work process of a pastry chef:
This pastry chef plans the deliveries he has during the week.The first thing you do is create the list of materials that you will need.Check the number of cakes you have to make from the number of orders.
Making those cakes involves a procedure that consists of phases:
Phase 1: The preparation of the dough requires 500 gr of flour, 1 lt of milk and three eggs.
Phase 2: Baking each cake requires an oven and electricity.
Phase 3: The glazed needs 1 kg of sugar and ½ kg of eggs.
Phase 4: For the decoration you need pastry tubes and candles.
Phase 5: For the cake delivery you need 1 cardboard box and a support.
As you can see, during the process specific materials and supplies were used, such as flour, egg and sugar, you have to define how much of each ingredient and material is needed.
In addition, you have to know what you need to buy because the inventory may already have some ingredients.
For all this, the pastry chef has the recipe and also has the knowledge to determine the time it takes to prepare the ingredients, make the cake and its time in the oven.
In this sense, this system has the function of calculating the quantities of product that will be manufactured, the components that will be necessary in each phase and the raw material that needs to be purchased. In other words, it will help you answer the following questions: What product should I produce? How much am I going to produce? And what is the ideal time to do it?
In addition, it will allow you to know what was the performance of each stage of the process and thus improve their efficiency.
What information does an MRP generate?
Here we list them:
Returns information on the capacity of a work center according to production orders. A work center is equivalent to a preparation, baking and decorating station.
It lets you know how efficient a workplace is.
Lets you know when a work center is at its maximum capacity, and you cannot assign more production orders to it.
It generates an inventory record for you.
You can create the list of materials, and at the end of the process it allows you to know how much material was consumed.
It offers you an analysis of the final costs of each product created and the consumption of material
MRP in Odoo
Odoo has an MRP module, which will be of great help for your company.
You will be able to organize your work orders easily, since you have access to all the resources to plan the future of your production. It also allows you to know how much material you have consumed, monitoring the availability of items in stock and the production time.
In addition, Odoo manages information between work centers to measure the OEE (Overall Equipment Effectiveness) or General or Global Equipment Efficiency indicator, which indicates the percentage of effectiveness of the machinery production.
You can also manage manufacturing orders and with the use of the barcode you can speed up manufacturing operations during each phase, from batch scanning, packaging, work orders and more!
As you can see, Odoo offers a solution for the planning and manufacturing of products, offering traceability, auditing and control of each stage of the production process, without neglecting the fact that it is 100% integrated into the processes that run in parallel: material purchases, inventory, sale of finished product and production costing in real time.
An MRP system will be the ideal ally that your company needs to achieve the best results, it will allow you to do the planning of your processes in a more detailed and much easier way, you will be able to make correct decisions for any problem that arises during the production process, This guarantees the efficiency and therefore the satisfaction of your customers.
