To support the need to reduce cost and time to market, greater emphasis is needed to control shop floor activities. For a well-organized manufacturing process, resulting elimination of bottleneck and waste, a reliable, flexible and user friendly production planning and control system is a must.
The planning engine of an ERP system, through closed loop MRP capability, generates planned production orders, based on the forecast demand, in respective monthly / weekly time buckets.
After confirmation, full functional production orders, with adjustable routing and components, states what quantity of product should be manufactured and its scheduled date of production.
While generating the production order, the system takes cognizance of the various factors related to the order like Production time, Machine Capacity and Availability of materials and components.
Based on this Planning, the subsequent functions need to be planned. For Instance, based on the availability of Materials the purchase of the materials short for production need to be initiated.
In the process above after the MRP Run, the relevant vendors are mailed the Delivery Schedules or Purchase Orders for the Materials required for production.
Such precise Material Planning, will further give the Inventory Management a Minimalism and hence induce “LEAN MANUFACTURING” practice in the business. This will further lead to Optimal Outputs from the given Input,hence increasing the Profit Margin of the Business.