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Why Material Requirement Planning is Critical & How to Make It Effective?

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Critical Shortage Warning Helps Us Procure on Time & Cost Effectively

MRP is critical for us because we follow a JIT system with the customers. We have export consignments; so in order to meet our delivery commitments, we need to plan our production accordingly. If there is a delay in production, we have to airlift the material instead of sending it by ship – that is premium freight. It is an additional cost to the company. Accurate inventory records are absolutely required for MRP to operate correctly and this delay in production is mostly a result of lack of inventory.

Microsoft Dynamics NAV ERP has helped us improve Material Requirement Planning efficiency to a great extent.

When the inventory for a particular material – required for production for the next 1 week or 3 days or whatever – is low, then there should be an alarm bell ringing in advance. To keep track of this, we have created a Critical Shortage Report in NAV. This report works by shooting an exigency warning if it detects the inventory levels falling below what is required in the next few days.

The system gives us a real time picture of inventory levels, as well as projected new purchases in accordance with our production schedule – helping us fulfill delivery commitments by achieving production targets. At the same time, reliable inventory information enables us to fulfill demand by ordering the required material on time and in optimal quantity – in turn helping reduce carrying costs and increase MRP cycle efficiency.

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