Material Resources Planning
Material Resources Planning (MRP) is a time-series analysis tool which helps you plan purchasing and production to meet customer demand. It will combine information about your current inventory with outstanding sales, purchases, and production orders to determine both the quantity and timing of additional inventory required. It will then create Requirements to help you order or manufacture more products to meet demand.
To use MRP, you must first set up the following information:
- Set up Bill of Material for products which you sell.
- Set up Product Suppliers for products which you purchase. You should designate a "Main Supplier" for the primary vendor of your products.
- Set up Inventory Stock Levels for all your products, by warehouse.
Then you can use the Run MRP Screen to run material resources planning for your warehouses. After running MRP, you can use the View MRP Screen to look at the results. You can also use the Open Requirements Screen to approve or cancel the requirements created by MRP and thus start the purchasing and production process.
How MRP Works
Imagine drawing a horizontal line across a piece of paper. Now imagine that it is a timeline, and as you move from left to right on the line, you are moving into the future. Pick a product. Now for each sales order you have, mark on the line the date when you must ship the order and the quantity you must ship to your customer. Repeat this for all upcoming receipts of inventory from your suppliers or from manufaturing operations at your company. Now you have a time line of all the "inventory events" for your product. You can then take the starting inventory of your product, move from left to right into the future, and calculate the inventory at different points in the future. Next, whenever the inventory dips below your minimum stock quantity, write down a "requirement" to obtain additional inventory. If this product is purchased from suppliers, then this means you need to purchase and receipt. If the product is manufactured, the requirement means you need to manufacture it.
You have just manually performed MRP for one of your products. A real MRP system is much more complicated and must consider delivery lead times and bills of materials for all of your products, but conceptually it is very similar to the process above.
The opentaps MRP system begins by creating the inventory events timeline.
To determine whether a product will be manufactured or purchased, the system will consider whether it has a Bill Of Material of its own and whether it has any supplier products defined for purchasing. By default, a part is considered manufactured if it has child nodes AND if it also has no unexpired SupplierProducts defined
