You would want MRP if you want the following:
- You want the right materials landing on the right dock with the right quantities at the right time.
- You want your receiving, storing, assembling and shipping of product to accurately flow to the GL. (this may be crossing into the bounds of ERP)
- You want to efficiently handle the movement of materials between multiple warehouses and destinations.
- You want to manage high-volume vs low-volume materials differently.
- You want to accurately fulfill orders in increased volume.
Here is an example Company that would benefit from MRP:
- Company is in the industrial goods wholesale distribution business.
- Company has larger warehouses in China and in the US.
- Company has 10 commercial outlets in the US and in Canada.
- Each outlet stocks high-volume products
- Each warehouse aggregates product from around the world.
- Company takes customer orders over the web, via customer service and walk-in outlet traffic.
- Each warehouse fulfills orders from all sources.
The MRP would help operations and accounting manage material coordination around the world to ensure (1) efficiency and (2) profitability. It accomplishes these goals by providing insight into predictive purchasing, insight into material availability, and accountability for order execution.
Here are some manufacturing demonstration videos using ADempiere and iDempiere:
- Introduction to ADempiere and iDempiere Manufacturing
- Simple Manufacturing Demonstration in ADempiere and iDempiere
- Light Manufacturing Demonstration using ADempiere and iDempiere
- Open Source ERP Manufacturing Feasibility Study – Perishable Goods
Another important concept is material costing. MRP helps provide insight into accurate material costing (product costs, freight, duties, taxes, handling, etc…). Accurate material costing provides insight into product and customer profitability. Again, this concept may be crossing into the ERP world.
MRP is to distribution as MRPII is to manufacturing. MRPII extends the MRP material policies into the production process. In some cases, MRPII is used in the destruction or reverse logistics of product as well.
I think I touched on all three: concepts, benefits and examples. I hope this helps!! Let me know if you have more questions.
About Chuck Boecking: I am an ERP educator. I believe that open source ERP have achieved mainstream capabilities, and as a result, more companies can create greater efficiency across their organization. I started using the iDempiere code base in 2003. Back then, it was called Compiere. In 2006, I started my first multi-million dollar installation. Since then, ADempiere has helped me create great success with distribution and manufacturing companies all over the world. My vision of success is to find companies that can best use open source ERP to help them achieve a single, global instance that drives a discontinuous increase in profitability. I believe that organizations win when they own their technology.
If you have questions, comments or concerns, let me know. I definitely want your feedback.
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