Material Requirement Planning (MRP) and the Departments Involved

Discover the MRP tool so you can make the appropriate planning for the production material needs of your company. With a good implementation, you will never run out of supplies and you will avoid stoppages.

Over the years, by means of education and experience in the Material Requirement Planning (MRP), I have come to understand that MRP is not only a parameterization that must be applied, but it is also team effort, one that that supports and ensures the success of planning material needs.

We tengo to think that for the success of MRP, we should only consider these three things:

• What?
• How Much?
• When?

Yet, if we forget about the full involvement of teams and departments, we will definitely make mistakes that will lead to poor decision-making.

Why do Different Departments of the Company Must Get Involved?

Different departments intervene in the processes of transformation/elaboration of a product. They all work on an specific task and are made responsible for it. Therefore, they become generators of the information that feeds and moves the MRP.

How do I know Which Departments Should be Involved for my MRP?

Since each organization may call its own departments different names -due to their own complexity or size- I will try to define them according to the MRP needs.

Asking WHAT? for the MRP Implementation by Department.

Department responsible for defining the product

• What components is the product made of?
• How many pieces of each component must it be made of?

Department responsible for the elaboration of the product

• Where will it be produced?
• Does it require special processes or sub-processes?
• Time of ellaboration
• Are there any special batches?
• How much waste will there be to make a batch?
• Is it produced internally, externally or partially?

Department responsible for the provisioning or purchase

• Who will they buy from?
• What is their delivery time?
• What is the purchase batch?
• Are there any special conditions for the purchase?
• What is their measurement unit?

Department responsible of quality

• Which are the parameters to inspect the quality of the raw material?
• Is there quarantine time?
• Who monitors quality during the process and what is being monitored?

Department responsible of storage

• Which warehouse will receive the material?
• Does it have room enough for the storage needed?
• Does it count with the special conditions needed for your specific kind of storage?
• Which will be the warehouse that will provide the production area?
• Which will be the warehouse that will receive the production?
• Which will be the warehouse that will ship the product?

Department responsible of finances

Although they are not directly related to the elaboration of the product, is a department that must be taken into account because it can modify the schemes.

• How much will the components cost?
• How much should be invested?
• How long will the material be stored?

Asking HOW MANY? and WHEN? for the MRP Implementation by Department.

This information depends on the detailing or planning time that we intend to apply. During this exercise, the departments that trigger long-term planning should be included in the process.

Department responsible for annual sales forecast

• How much does the company expect to sell from each product family?
• What destinations are considered?

Department responsible for the commercialization of products

• How much of each product do you expect to sell?
• Which destinations are considered?

Department of customer service

• Is there market information from the customer?

Department responsible of demand planning

• How much do you expect to produce from each product?
• What destinations are considered?

Department responsible for the sale or receipt of orders.

• How much has the client required?
• What is the destination of the product?
• When should you be shipping the product?

Department responsible for shipping the orders.

• How much of each product should be shipped?
• When should each product be shipped?

Registration of MRP Inputs

The before-mentioned information is basically the information input required for the MRP from all the different areas. Having all this data, we proceed to register it in three areas:

1. Master Data

All that data that specifies the conditions for the raw material as well as for finished products since, regardless of the quantity or quality of the demand, it should be considered for the planning of materials.

2. Long-Term Planning

This is the data that specifies which amounts are expected to be produced, usually in monthly periods, in order to anticipate all kinds of resources needed.

3. Short-Term Planning

It is the data that specifies the market's demand; goods that are already being produced in order to cover the customer's needs.

Recommendations for and MRP Implementation

I suggest that not only a system for the collection of the data (like the one described above) is established, but also the periods of time set to review each one of them. This recommendation is based on the fact that the market is very dynamic and thus, it constantly modifies the production chain, so if something is not up-to-date, it will probably generate a series of setbacks that will jeopardize the delivery of the product.

My Experience With MRP

Based on my experience, I must say that the involvement of the departments in the MRP process is key to achieving good results. Each department has an impact on the MRP and, when the information is open and accurate, influences the production chain. They also have an impact on the MRP whenever they carry out activities that help systematize the information process of their department.

In my next article, I will talk about the communication needs of the departments involved within the MRP process and about the variation of demand. If you have any questions regarding this article, feel free to leave your comments here. I'd be glad to respond.

You can also come to Casa Sauza yourself and see how our tequila production process works on-site. We are always happy to share our information with you!