Discuss the importance of MRP in production planning system
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Answer:
Materials Requirements Planning (MRP) was developed back in the 1970s to help manufacturers streamline their planning, production and inventory control. It is a framework to help businesses plan operations, control their inventory and organise their logistics. Done properly, MRP ensures that manufacturers have the right quantity of materials at the right time for production to take place.
Managing this flow of raw materials, components or parts from their supply chain and into production and onto the customer effectively is challenging but necessary for the continued success of every manufacturer. Poor management of these means there’s a very real possibility that you’ll either run out of inventory or be unable to fulfil your customer orders. In today’s highly competitive environment, these are not risks any manufacturer wants to take.