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Material requirement planning (MRP) is a method to craft a plan for the necessary materials for manufacturing. You need to answer the questions of what types of materials are required, their quantity and last but not the least at what time you want them. Claiming is simpler than getting it done. It seems true in this case. For seeking the response of these queries, quite work is to be done.
If you have been doing it manually, then leave it abruptly. ERP software for manufacturing can facilitate MRP processes. Here’s how. 1- Work Orders To date, if you have been generating work orders manually by putting in your precious effort, time and energy then use of best ERP software will make it history. Within no time, you will be able to prepare work orders from sales orders, and without the involvement of human error. This solo database will enable you to administer your workflow, i.e., required materials, labor and machinery. Such work orders are a result of accurate information. Besides this, you have the leverage of tracking work order because it passes through several stages. 2- Job Cost Markup Rate Moving a step ahead after creating a work order. You are empowered with ERP to calculate job cost markup rate. Let me segregate it into two parts, i.e., job cost and markup rate. Job cost articulates the cost incurred in manufacturing the product. On the other hand, markup rate refers to the profit made from the product. With an ERP solution, you can calculate job cost markup automatically which thereby helps in adjusting your investments and funds. 3- Cost of Purchased Materials In material requirement planning procedure, it is an indispensable fact to gauge the cost of raw materials you need for production. By incorporating an ERP software, you can get over this task in no time. What will happen is your subsequent tasks in the coming times will be informed and planned. Since ERP will provide you a clear picture whether you need to purchase raw materials only or finalizing a contract with vendors would be profitable. In an affordable budget, they could manufacture the products as well. In a nutshell, with minimum cost you will generate more markup. 4- Estimating Cycle Time In order to know when and which raw materials you need becomes a lot easier if you are aware of the cycle time. It indicates the time, which is utilized in each production phase from the scratch till end. It is sort of a KPI letting you know the output of every manufacturing stage. Through an estimation of cycle time, material requirement planning and budgeting remains no issue. Isn’t it great to jumpstart your MRP procedure with an ERP which widens avenue of profit maximization? Closing Thoughts The aforesaid advantages can't be ignored undoubtedly and you are supposed to be a user of ERP software. When you will actually try your hands on it, you will experience much more for your manufacturing system. MIE Solutions provide an advanced ERP software with all these and many other substantial features. |
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