Tag: mrp

  • Streamlining Inventory with Material Requirements Planning

    Streamlining Inventory with Material Requirements Planning

    SapphireOne Material Requirements Planning (MRP) gives you total control of your inventory and production process.

    Total Inventory and Production Control with SapphireOne MRP

    SapphireOne Material Requirements Planning (MRP) gives you complete visibility and control over your inventory and production processes. With built-in forecasting and historical analysis, MRP helps businesses control inventory levels, enhance production efficiency, reduce costs, and plan confidently for the future.

    What Is Material Requirements Planning?

    Material Requirements Planning (MRP), sometimes referred to as Material Resource Planning, is a production planning, scheduling, and inventory control system designed to improve productivity within manufacturing and distribution environments.

    At its core, MRP is designed to answer three fundamental business questions:

    • What is needed?
    • How much is needed?
    • When is it needed?

    By answering these questions accurately, businesses can avoid overstocking, minimise shortages, and align production with demand.

    How Material Requirements Planning Works

    MRP works backwards from a production plan for finished goods. This plan is converted into detailed requirements for:

    • Sub-assemblies
    • Component parts
    • Raw materials

    All requirements are scheduled to ensure the final product can be delivered within the required timeframe.

    Without proper resource planning, businesses often struggle with:

    • Excess inventory holding costs
    • Production delays
    • Missed or unfulfilled customer orders

    Effective MRP removes these inefficiencies by aligning inventory, production, and demand.

    Components of SapphireOne Material Requirements Planning

    SapphireOne’s Inventory Management module includes a fully integrated MRP feature that allows resource planning to be managed directly within the ERP system.

    SapphireOne’s MRP functionality is built around two core capabilities:

    1. Historical Usage Analysis
      • Track, adjust, and analyse historical inventory usage
      • Review usage data across the past 2, 3, or 4 years
      • Identify trends, seasonality, and anomalies in demand
    2. Forward Forecasting
      • Forecast future material requirements up to 2.5 years ahead
      • Calculations are driven by historical usage data
      • Forecasts update dynamically as data is adjusted
    Control inventory, enhance production, reduce costs and forecast for the future with SapphireOne MRP.

    Key Features of the SapphireOne MRP Forecasting Tool

    The Forecasting tool allows businesses to model future inventory requirements with precision and flexibility.

    Key features include:

    • Forecast material requirements up to 2.5 years in advance
    • Fully adjustable forecasting values that automatically recalculate when changed
    • Ability to account for unexpected events by modifying forecast inputs
    • Support for multiple planning variants, including:
      • Minimum and maximum inventory levels
      • Fixed Order Quantities (FOQ)
      • Supplier lead times
    • Editable forecast lines (highlighted in blue) for tailored planning
    • One-click Save & Recalculate to generate updated forecasts
    • Forecasting available for total inventory or individual inventory items
    How does Material Requirements Planning work

    MRP Usage History Tool

    The Usage History tool provides insight into past inventory behaviour and directly influences future forecasts.

    Key capabilities include:

    • Record and review historical usage for 2, 3, or 4 years
    • Interactive usage graph that can be manually adjusted
    • Blue data points can be moved to reflect corrected or exceptional historical periods
    • Automatic recalculation of future forecasts based on adjusted historical data
    • Analysis available for total inventory or specific inventory items
    SapphireOne Material Requirements Planning Tool.

    Benefits of the SapphireOne MRP Tool

    Inventory Control

    • Ensure materials are available when needed
    • Track stock on hand accurately
    • Minimise excess inventory
    • Plan future material requirements with confidence

    Cost Reduction

    • Reduce holding and storage costs
    • Improve purchasing efficiency
    • Maintain a steady and predictable inventory flow

    Enhanced Scheduling

    • Allocate production time efficiently across products
    • Achieve economic order quantities consistently

    Production Optimisation

    • Ensure the right materials are available in the right quantities at the right time
    • Reduce waste and downtime
    • Improve utilisation of equipment and labour

    Improved Supplier Relationships

    • Align demand planning with supplier capacity
    • Improve transparency and communication
    • Create more reliable purchasing and delivery schedules

    Future Planning

    • Use historical sales and usage data to support informed forecasting
    • Save time, resources, and costs through better planning decisions

    A step-by-step video walkthrough is available, demonstrating how to use the SapphireOne MRP tool and how it can improve inventory and production processes.

    As always, if you have any questions about how our Inventory Management functionality and MRP feature can help your business, please do not hesitate to get in touch or book a demo with a member of our team. We’re always here to help!

  • MRP Software Enhances Production Planning & Inventory Control with SapphireOne ERP

    MRP Software Enhances Production Planning & Inventory Control with SapphireOne ERP

    Material Resource Planning (MRP) is a computer based inventory management system. MRP generates time-based manufacturing and purchasing plans for optimal inventory availability which is tied to historical data of customer demands. MRP is a subset of ERP for managing manufacturing requirements using integrated production planning and inventory controls. The main theme of MRP software is –

    “Getting the right materials to the right place at the right time “

    In any inventory management, regardless of the level of sophisticated technology used, the Saw Tooth pattern is followed. In this pattern there is a certain amount of inventory that you start with, then you consume it, stock levels drop, you re-order the stock, you receive this stock and the process continues.

    There are four distinct steps –

    1. Demand / Consumption – You have an amount which you are consuming or you are expecting to consume.
    2. Re-order point – Once your stock drops down to a certain level then you will need to re-order (This level should be set in your inventory).
    3. Demand during Lead time – After re-ordering you continue to consume while the re-order is on its way
    4. Replenishment – New stock arrives before your inventory has run out of stock completely.
    Material Resource Planning (MRP)

    MRP software balances supply and demand. It also monitors what you are consuming and informs you when it is time to re-order.

    MRP takes into account 3 key points –

    1. What you need – The total amount of material required to be on hand to support the gross demands of the business
    2. What you have – The supply you actually have in your stockrooms, retail shelves, warehouse, other locations, and what is already on order but has not yet been received.
    3. What you require to re-order and when – The net planned quantities and dates required to support the demands of your business, based on the Supply you already have, and have on order.

     

    SapphireOne MRP software solution

    A simple example of SapphireOne MRP Software Functionality

    SapphireOne MRP function forecasts can be calculated or entered manually. These forecasts can be dependent and controlled by sales orders, purchase orders. In SapphireOne there is also provision for it to be independent as the user may adjust estimations manually if required.  Let’s consider, SapphireOne MRP Forecasting for May, Jun, July 2022

    May 2022

    1. Based on the previous 2 years’ sale (Usage History Graph), SapphireOne MRP has calculated the requirement 1251 stock for the month May 2022. SapphireOne also has the capability to calculate this requirement based on up to 4 years’ historical sales.
    2. Since there are already 1699 inventory items on hand (from the month April) plus an additional 500 inventory items required for orders in May 2022. That’s why at the end of May the system has indicated that approximately 948 inventory items will remain on hand.

    June 2022

    1. Forecasting for June 2022 inventory stock levels are 745. As there are 948 stock on hand from the previous month, therefore, the system has estimated stock on hand in June is 203 items.

    July 2022

    1. Projected stock requirements for July 2022 is 1050. In this case, previous month’s stock on hand, 203, is unable to fulfil the requirements. Since the system knows there is 21 days’ lead time, the artificial intelligence (AI) that is part of the SapphireOne MRP system, will indicate 21 days before that month that an additional 847 stock items be ordered.
    2. The system is set up in a way that inventory should never run out of stock and there will always be the minimum inventory items as entered, on hand. Thus, to fulfill July requirements which is 1050 stock, the calculation is as follows-
    Stock on hand After filled: 203 [ From month Jun 2022]
    Stocks Required for July 2022: 1050
    Net required: 1050 – 203 = 847
    But minimum stock on hand set for every month is 6.
    Hence, the Planned Order Release / Planned order arrival is: 847+6 = 853
    SapphireOne MRP software helps to forecast inventory requirements

    SapphireOne MRP system is a powerful resource planning tool that ensures you satisfy your clients requirements while maintaining an inventory level that will enable you to fulfil any normal orders based on historical records.

    SapphireOne MRP system’s material planning, purchasing and inventory reports, allow you to establish just-in-time relationship with your clients and vendors. This enables you to take advantage of any quantity price breaks but paying for materials only as you need, to fulfil future orders.

    Discover how SapphireOne ERP, CRM and Business Accounting software suite can satisfy your customer requirements while maintaining optimal inventory levels. To know more request a live demo today.