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7/25/2019 There Are Many ERP Modules in ERP Software Solution
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What is ERP?
ERP attempts to integrate all departments and
functions across a company onto a single
computer system that can serve all those
different departments particular needs.
A single software program that serves the
needs of people in finance as well as it does
the people in human resources and in the
warehouse. Each of those departments
typically has its own computer systemoptimized for the particular ways that the
department does its work.ERP combines them
all together into a single, integrated software
program that runs off a single database so
that the various departments can more easily
share information and communicate with each
other.
ERP vanuishes the old standalone computer
systems in finance, !R, manufacturing and
the warehouse, and replaces them with a
single unified software program divided into
software modules that roughly appro"imate
the old standalone systems. #inance,
manufacturing and the warehouse all still get
their own software, e"cept now the software is
linked together so that someone in finance
can look into the warehouse software to see if
an order has been shipped. $ost vendors
ERP software is fle"ible enough that you can
install some modules without buying the
whole package. $any companies, for
e"ample, will %ust install an ERP finance or !R
module and leave the rest of the functions for
another day.
How can ERP improve a
companys business
performance?
ERP is often referred to as back&office
software. 't doesnt handle the up&front selling
process (although most ERP vendors have
developed )R$ software or acuired pure&
play )R$ providers that can do this*+ rather,
ERP takes a customer order and provides a
software road map for automating the different
steps along the path to fulfilling it. hen a
customer service representative enters a
customer order into an ERP system, he has
all the information necessary to complete the
order.
People in these different departments all seethe same information and can update it. hen
one department finishes with the order it is
automatically routed via the ERP system to
the ne"t department. -o find out where the
order is at any point, you need only log in to
the ERP system and track it down. ith luck,
the order process moves like a bolt of
lightning through the organization, and
customers get their orders faster and with
fewer errors than before. ERP can apply that
same magic to the other ma%or business
processes, such as employee benefits or
financial reporting.
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Evolution of
ERP
ERP is an outcome of 40 years of trial and
error. It has evolved as a strategic tool
because of continuous improvement in the
available techniques to manage business and
the fast growth of information technology.
Prior to 1!0s" business had to rely on the
traditional ways of inventory management to
ensure smooth functioning of the
organi#ation. $hese theories are called
classical inventory management of scientific
inventory control methods. $he most
popularly %nown amongst them is E&'
(Economic &rder 'uantity).
In this method" each item in the stoc% is
analy#ed for its ordering cost and the
inventory carrying cost. * trade off is
established on a phased out e+pected
demand of one year" and this way the most
economic ordering quantity can be decided.
$his technique in principle is a deterministic
way of managing inventory.
*long with E&'" we find various inventory
models such as fi+ed order quantity" periodic
order method" optional replenishment
method" etc." which were in practice earlier.
$hese theories were very popular in pre,
-RP era.
In 1!0s" a new technique of -aterial
Requirements Planning" popularly %nown as
-RP" was evolved. $his was a proactive
manner of inventory management. $his
technique fundamentally e+plodes the end
product demand obtained from the -aster
Production chedule (-P) for a specified
product structure (which is ta%en from /illof -aterial) into a detailed schedule of
purchase orders or production orders" ta%ing
into account the inventory on hand. -RP is
a simple logic but the magnitude of data
involved in a realistic situation ma%es it
computationally cumbersome. If underta%en
manually" the entire process is highly time,
consuming.
-RP successfully demonstrated its
effectiveness in reduction of inventory"
production" and delivery lead times by
improving coordination and avoiding delays"
thus ma%ing commitments more realistic.
-RP proved to be a very good technique for
managing inventory" but it did not ta%e into
account other resources of an organi#ation.
In 10s" this gave birth to a modified -RP
logic" popularly %nown as closed loop -RP.
In this technique" the capacity of the
7/25/2019 There Are Many ERP Modules in ERP Software Solution
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organi#ation to produce a particular product
is also ta%en into account by incorporating a
module called capacity requirements
planning (RP).
In 120s" the need was felt to integrate the
financial resource with the manufacturing
activities. 3rom this evolved an integrated
manufacturing management system called
-anufacturing Resource Planning (-RP II).
$ransition from -RPII to ERP happened
during 120,0. $he basic -RP II system
design was suffering from a few inherent
drawbac%s such as limited focus to
manufacturing activities" assumption of the
mass or repetitive production set ups" and
poor budgetary and costing controls.
$he shortcomings of -RP II and the need tointegrate new techniques led to the
development of a total integrated solution
called ERP" which attempts to integrate the
transactions of the organi#ation to produce
the best possible plan. $oday we see further
development in the ERP concept and
evolution web,based ERP.
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ERP Modules
Enterprise Resource Planning ERP
Enterprise Resource Planning (ERP)
software is usually pac%aged in functional
pieces5 that can be implemented in various
combinations. $hese ERP software
modulesaddress specific functions li%e
inventory control" planning" customer ordermanagement" purchasing" production
control" general ledger" accounts payable"
etc.
$his functional organi#ation adds to the
fle+ibility of the ERP product. * distribution
company that does little or no manufacturing
can license and install the financial
applications" purchasing" customer order
management and inventory" for e+ample"
and have a solution tailored5 to their needs.
If at a later time they e+pand into
manufacturing" they can license additional
modules that will essentially snap in place
and e+pand the system as needed.
$his modular design also allows software
developers to put together product offerings
for specific industries. /y adding a module
of food safety software" quality management
and lot trac%ing" or product configuration"
for e+ample" an otherwise general purpose
ERP system becomes a niche product that is
well suited for a company in the food
industry. /y developing modules with
specific functionality" an ERP vendor can
assemble a variety of niche products li%e
ERP for automotive suppliers" ERP software
for life sciences" ERP for chemicals" etc.
-odular design helps developers focus on
specific industries and functional needswhile not re,inventing the wheel by
duplicating the more universal functions li%e
inventory control and purchasing.
ustomers benefit by not having to buy and
maintain functionality that they don6t want
or need.
-ost ERP software has grown and
broadened over the years in part by adding
new modules to the product offerings. ome
of these are developed from scratch to
capture demand opportunities and some in
response to customer requests. ome
modules are the result of acquisition7 the
ERP developer might buy a company with a
point solution5 that can be converted into a
module of the ERP system.
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$here are many ERP modules in ERP
software solution. Each ERP software
module corresponds to a ma8or functional
area of an organi#ation. 9enerally it
includes" modules for material purchasing"
inventory control" product planning" product
distribution" trac%ing the order" financial
ERP module" accounting" mar%eting" and
human resource. &rgani#ations implement
the modules in ERP that are both
economically and technically feasible and
profitable. $his document of &E: (ite
&pen ource ERP) will focus on each ERP
software modules in detail. $o %now more
about ERP systems refer other pages of this
site.
ERP finance module
*ll %ind of organi#ations small scale" large
scale organi#ations benefit from the
implementation of ERP financial module.
$he financial module is the core of many
ERP software systems. It can gather
financial data from various functional
departments" and generates valuable
financial reports such general ledger" trail
balance" as balance sheet and quarterly
financial statements.
ERP HR (Human Resources) Module
;uman Resources is another widely
implemented ERP module. ;R module
streamlines the management of human
resources and human capitals. ;R modules
routinely maintain a complete employee
database including contact information"
salary details" attendance" performance
evaluation and promotion of all employees.
*dvanced ;R module is integrated with
%nowledge management systems to
optimally utili#e the e+pertise of all
employees.
ERP Production Module
In the process of evolution of manufacturing
requirements planning (-RP) II into ERP"
while vendors have developed more robust
software for production planning" consulting
firms have accumulated vast %nowledge of
implementing production planning module.
Production planning optimi#es the
utili#ation of manufacturing capacity" parts"
components and material resources using
historical production data and sales
forecasting.
ERP Purchasing Module
Purchase module streamline procurement of
required raw materials. It automates the
http://www.open-source-erp-site.com/erp-finance-module.htmlhttp://www.open-source-erp-site.com/erp-hr-module.htmlhttp://www.open-source-erp-site.com/erp-production-planning-module.htmlhttp://www.open-source-erp-site.com/erp-purchasing-module.htmlhttp://www.open-source-erp-site.com/erp-hr-module.htmlhttp://www.open-source-erp-site.com/erp-production-planning-module.htmlhttp://www.open-source-erp-site.com/erp-purchasing-module.htmlhttp://www.open-source-erp-site.com/erp-finance-module.html7/25/2019 There Are Many ERP Modules in ERP Software Solution
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processes of identifying potential suppliers"
negotiating price" awarding purchase order
to the supplier" and billing processes.
Purchase module is tightly integrated with
the inventory control and production
planning modules. Purchasing module is
often integrated with supply chain
management software.
ERP Inventory Module
Inventory module facilitates processes of
maintaining the appropriate level of stoc% in
a warehouse. $he activities of inventory
control involves in identifying inventory
requirements" setting targets" providing
replenishment techniques and options"
monitoring item usages" reconciling the
inventory balances" and reporting inventory
status. Integration of inventory control
module with sales" purchase" finance
modules allows ERP systems to generate
vigilant e+ecutive level reports.
ERP Sales and Marketing Module
ales module implements functions of order
placement" order scheduling" shipping and
invoicing. ales module is closely integrated
with organi#ations6 ecommerce websites.
-any ERP vendors offer online store front
as part of the sales module. ERP mar%eting
module along with RP supports lead
generation" direct mailing campaign and
other mar%eting wor%s. cheduling of the
promotion is possible using this. &E: is
free website which will guide you in
selecting and implementing different ERP
systems and modules in ERP. Primary focus
is on open source ERP systems. /ut it help
in commercial ERP systems too.
ERP TransitionStrategies
http://www.open-source-erp-site.com/erp-inventory-module.htmlhttp://www.open-source-erp-site.com/erp-sales-module.htmlhttp://www.open-source-erp-site.com/erp-inventory-module.htmlhttp://www.open-source-erp-site.com/erp-sales-module.html7/25/2019 There Are Many ERP Modules in ERP Software Solution
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*n ERP implementation strategy determines
how the ERP system will be installed.
. $he same industry may implement
different software in the same approach.
$here are several transition strategies but
most of them are variants of the five basic
types7
a) /ig /ang b) Phased c) Parallel d) Process
?ine e) ;ybrid
$hese techniques focus on the strategy of
how to ma%e the transition from a legacy
system to a new ERP system. ERP
implementations all begin with the simple
question, how do we ma%e the transition
from our inheritance ERP system to new
ERP system@ $he selection of the transition
strategy that is best suited for each industry
is crucial as a wrong strategy can result in a
failed or flawed implementation. $hree
pillars,people" process and technology are
the base of any ERP implementation. 3ailure
to use one of these or failure to use it in the
best possible manner can result in failure.
Anderstanding the relationships of ERP
transition strategies between the process"
people" and technology will assist the ERP
implementers to better understand what type
or combination of types of ERP transition
strategy is best.
Big Bang Transition Strategy:
In this strategy industries layout a
magnificent map for their ERP
implementation. $he installation of ERP
systems of all modules happens across the
entire organi#ation at once. $he big bang
approach promised to reduce the integration
cost in the condition of thorough and careful
e+ecution. $his method dominated early
ERP implementations and it partially
contributed to the higher rate of failure in
ERP implementation. *ll the business
functions performed in the inheritance
system across the entire enterprise are
concurrently transferred to the new legacy
system during a period of one day or awee%end. /ut now a day6s industries are
wavering to use big bang approach as it
consumes too many resources to support the
go,live of the ERP system. uccess in using
the big bang approach comes with careful
preparation and planning prior to using big
bang. /ut many industries struggle to decide
whether the big bang approach is the right
selection or not for their endeavor.
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Phased Transition Strategy:
$he phased approach" implements one
practical element at a time" in chronological
order as shown in fig. *utonomous modules
of ERP systems are installed in each unit"
while integration of ERP modules is done at
later stage of the pro8ect. $his has been the
most commonly used method of ERP
implementation. Each business unit may
have its own instances5 of ERP and
database. -odular (phased) implementation
reduces the ris% of the installation"
customi#ation and operation of ERP systems
by reducing the scope of the
implementation. $he unbeaten
implementation of one module can help the
overall success of an ERP pro8ect. $he
interface programs that are used in this
strategy bridge the gap between the
inheritance ERP system and the new ERP
system until the new ERP system becomes
fully purposeful. $his strategy is often used
in situations that not have strong centrali#ed
synchroni#ation in the ERP pro8ect.
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Parae Transition Strategy:
$he parallel approach %eeps both the
inheritance system and the new ERP system
active concurrently for a length of time as
shown in fig. $he amount of time for which
both the systems are in operation ranges
from one day to several months and may be
to years. Portions of the same functional
business areas (including software) such as
finance" manufacturing" mar%eting etc. are
operating at the same time for both the
legacy and ERP systems. *n advantage to
the parallel strategy is that it has good
improvement options in case something
goes off beam. /ecause both the inheritance
ERP system and the new ERP system are in
function at the same time for a particular
module" the industry6s business processes
will not be bro%en up if the new ERP system
brea%downs. $he parallel approach also
provides the most sensible number,to,
number comparisons to authenticate that the
new ERP system is performing the
necessary business process flows. $his
strategy is ideally suited for mission critical
situations that cannot survive a ma8or brea%
down of an ERP system.
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Process !ine Transition Strategy:
$he process line transition strategy brea%s
the implementation strategy to handle
similar business process flows or product
lines. Asing the process line strategy" the
first product line and related assets go first
in ma%ing the transition from the inheritance
system to the new ERP system. &nce this
transition is achieved successfully" the
second product line is moved from the
inheritance system to the new system. $his
initial success helps to build industrial faith
in the new ERP system" increasing its
overall prospect of success. Apon
achievement of the first process line"
resources are loaned to the more
complicated and challenging process lines.
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Hybrid Transition Strategy:
It is the combination of any of the
implementation strategy li%e process line"
phasing and parallel implementation
strategy. ;ybrid strategies tend to evolve
into the needed agreement as ERP team
members study and consider information.
$he comple+ity of a hybrid strategy varies
tremendously depending upon the state.
mall single,site ERP implementations tend
to have simpler hybrid strategies than those
used by large conglomerate corporations
with many dissimilar environmental
locations. -any implementations use hybrid
strategies because they are fle+ible in
adapting to the specific needs of the
situation. Bith the hybrid strategy" industries
can e+clusively ad8ust implementations for
their needs.
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Advantages
Increased Costeffectiveness
7/25/2019 There Are Many ERP Modules in ERP Software Solution
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other average business software" the training
becomes necessary and e+pensive. $he
employees of the company have to perform
their daily tas%s and learn the usage of the
ERP software system at the same time. $o
lessen the companyCs burden" there are many
training firms which are speciali#ed in
coaching employees about the functionality
of the ERP software from different vendors.
Enhanced !ork Efficiency
ERP systems enhance the efficiency of the
whole organi#ation by smoothly integrating
its various divisions. It also helps in
reduction of paper documents and provides
an online format for quic% storage and
retrieval of information. ERP ensures a
quic% response to changes in mar%et
conditions and also improves the
productivity of the company by providing
each department with their own computer
system" data and database. ross computer
system communication can also be done
within these departments" in order to store or
retrieve information. $his results in a unified
wor%ing of all aspects of an organi#ation"
instead of every single system needing to be
compatible with each other.
Integration of "usiness #unctions
*s the ERP system integrates data and
process from different divisions of an
organi#ation" it enables easier access and
wor% flow. Its multiple software modules aid
the coordination of various business
functions in an organi#ation. $his
integration provides an opportunity for the
various divisions to share a unified database
and ensures proper business communication
within the organi#ation. $his centrali#ation
of data in one place eliminates the problem
of synchroni#ing the changes made by
different departments and people. It also
reduces the ris% of loss of confidential data"
by applying difficult,to,crac% networ%
security models. ERP systems also provide
an efficient method for data recovery" in
case of a system crash.
Im$roved International %$erations
ERP systems support a variety of ta+
structures" different currencies of the world
and multiple languages" which ma%es it a
truly international software. It is suitable for
global operations because of its diversifiedaccounting standards and the ability to
manage world,wide clients and resources.
ERP also assists the improvement of the
supply , demand lin%ages with the remote
locations and branches in different regions
7/25/2019 There Are Many ERP Modules in ERP Software Solution
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or countries.
Disadvantages
ompared with traditional more archaic
methods current ERP systems several
disadvantages have been identified
, It is difficult to incorporate changes
and customi#ations required as business
processes change. $he systems encode
process definitions in proprietary source
code. hanging this code is difficult" ris%y"
e+pensive" and therefore rarely done. *s a
result most organisations forego
opportunities to optimi#e their processesD
, $he systems focus on what
organisations have in common and not on
processes where real value is created for
individual customers. $his is due to ERP
systems being developed for hori#ontal
operational processes in the value chain but
unable to effectively support or automate the
many vertical specific business processes
where real value is createdD
, Inability to grow or wor% with other
systems. urrent systems do not integrate
well with other feeder systems from third
party suppliers. $his ma%es the initial
deployment difficult since certain aspects
cannot be easily and cheaply integrated and
subsequently upgraded without soaring
deployments costs.
ERP Vendors
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7/25/2019 There Are Many ERP Modules in ERP Software Solution
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ERP
Package
&anguage
"ase
&icense %ther Info 'evelo$er
Country
*1 ERP Gava *lliance
$echnologies &pen
?icense
ERP for Public ector"
*cademia" ;ealthcare"
?ogistics *1 ERP
Borldwide
*da+a uite Gava 9P? Integrated ERP built
on *dempiere
*ustraliaHew
ealand
*dempiere Gava 9P? started as a for% of
ompiere
pain
ompiere Gava 9P?Hommercial *cquired by onsona
orporationin Gune
J010
A
7/25/2019 There Are Many ERP Modules in ERP Software Solution
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Ouali
3oundation
Gava E? for higher education"
by higher education
?edger-
/
Perl"
Postgre'?
9P? started as a for% of
'?,?edger in J00!
Borldwide
&3/i# *pache" Gava *pache ?icenseJ.0 ERP for small and
medium businesses
&penbravo Gava &penbravo Public
?icense (&/P?)" a
free software license
based on the -o#illa
Public ?icense
(-P?)
pain
&penERP Python"
Postgre'?
*9P?vN &penERP version .0
was released on
1JHJ1H1J" &penERP
was formerly %nown
as $iny ERP
/elgium"
India" A*
Phreedom P;P"
Gavascript"
-y'?
9P?vN E+panded from
Phreeboo%s accounting
engine
A*
Postboo%s "
Gavacript"
Postgre'?
P*? Produced by M$uple"
uses 'tframewor%
'?,
?edger
Perl"
Postgre'?
9P?
$ryton Python 9P?vN started as a for% of
&penERP
BebERP P;P" -y'? 9P?vJ ?*-Pbased system
http://en.wikipedia.org/wiki/Kuali_Foundationhttp://en.wikipedia.org/wiki/Kuali_Foundationhttp://en.wikipedia.org/wiki/Educational_Community_Licensehttp://en.wikipedia.org/wiki/LedgerSMBhttp://en.wikipedia.org/wiki/LedgerSMBhttp://en.wikipedia.org/wiki/GPLhttp://en.wikipedia.org/wiki/OFBizhttp://en.wikipedia.org/wiki/Apache_Licensehttp://en.wikipedia.org/wiki/Openbravohttp://en.wikipedia.org/wiki/OpenERPhttp://en.wikipedia.org/wiki/Affero_General_Public_Licensehttp://en.wikipedia.org/wiki/Phreedomhttp://en.wikipedia.org/wiki/GPL#Version_3http://en.wikipedia.org/wiki/Postbookshttp://en.wikipedia.org/wiki/CPALhttp://en.wikipedia.org/wiki/XTuplehttp://en.wikipedia.org/wiki/Qt_(framework)http://en.wikipedia.org/wiki/SQL-Ledgerhttp://en.wikipedia.org/wiki/SQL-Ledgerhttp://en.wikipedia.org/wiki/GPLhttp://en.wikipedia.org/wiki/Trytonhttp://en.wikipedia.org/wiki/GPL#Version_3http://en.wikipedia.org/wiki/WebERPhttp://en.wikipedia.org/wiki/GPL#Version_2http://en.wikipedia.org/wiki/LAMP_(software_bundle)http://en.wikipedia.org/wiki/Kuali_Foundationhttp://en.wikipedia.org/wiki/Kuali_Foundationhttp://en.wikipedia.org/wiki/Educational_Community_Licensehttp://en.wikipedia.org/wiki/LedgerSMBhttp://en.wikipedia.org/wiki/LedgerSMBhttp://en.wikipedia.org/wiki/GPLhttp://en.wikipedia.org/wiki/OFBizhttp://en.wikipedia.org/wiki/Apache_Licensehttp://en.wikipedia.org/wiki/Openbravohttp://en.wikipedia.org/wiki/OpenERPhttp://en.wikipedia.org/wiki/Affero_General_Public_Licensehttp://en.wikipedia.org/wiki/Phreedomhttp://en.wikipedia.org/wiki/GPL#Version_3http://en.wikipedia.org/wiki/Postbookshttp://en.wikipedia.org/wiki/CPALhttp://en.wikipedia.org/wiki/XTuplehttp://en.wikipedia.org/wiki/Qt_(framework)http://en.wikipedia.org/wiki/SQL-Ledgerhttp://en.wikipedia.org/wiki/SQL-Ledgerhttp://en.wikipedia.org/wiki/GPLhttp://en.wikipedia.org/wiki/Trytonhttp://en.wikipedia.org/wiki/GPL#Version_3http://en.wikipedia.org/wiki/WebERPhttp://en.wikipedia.org/wiki/GPL#Version_2http://en.wikipedia.org/wiki/LAMP_(software_bundle)7/25/2019 There Are Many ERP Modules in ERP Software Solution
18/26
Next generation
ERP strategies
& ali!ation
QEarly on" the ERP philosophy was to ma%e
sure your business wor%ed around the
software" but I donCt thin% that model was
very successful"Q says /rad -anning" I&
at 'ua%er hemical" a onshohoc%en" Pa."
chemicals manufacturer. Q$he evolution of
ERP is to move toward being more fle+ible
and dynamic so you can configure the
systems around your business.Q
ERP II
ERP II is regarded as the ne+t generation5
of ERP (enterprise resource planning) and
offers several advantages over traditional
ERP systems. ERP systems have historically
been mostly limited to 3inance and
*dministration" primarily serving logistics"
supply chain" and warehousing functions.
ERP II e+pands the scope of ERP to offer
solutions for a broader range of industries
and sectors. *n ERP II solution offers
greater fle+ibility in the integration of
functions between departments and even
industries. *nd" generally spea%ing" an ERP
II system is a much more Beb,friendly5
application that ma%es better use of the
Internet" especially as a means for support.
ERP II encourages user participation"
facilitating interaction between customers
and vendors" which effectively eliminates
the difficulties that resulted from limited
communication. ERP II evolved from its
predecessor. It originated due to ERPCs
failure. $he contribution of ERP in
redefining enterprise operations is still
significant but not enough. ;ence ERP II
has been devised to overcome the drawbac%s
of ERP. $hey have been devised by wor%ing
on the wea%ness and disadvantages of ERP.
7/25/2019 There Are Many ERP Modules in ERP Software Solution
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$he comparative study of ERP II and ERP
shows that it overplays its successor in all
areas. $he significant advancement ma%es
one call into question if ERP II will
completely replace ERP from the mar%et
entirely as users become more and more
informed and less impressed with the well
recogni#ed logo6s that have come to
symboli#e endless customi#ation" ris% and
rigidity.
ERP iii "the ne't
generation of Enterprise
Resource Panning$
$his will encompass the integration of social
media with new mar%etplace intelligence
and analytics into the ERP ii enterprise.
Bith a very simply hub and spo%e5 idea"
the enterprise will constitute the hub5 and
the e+tended supply chain vendors"
engineers" and designers" together with
customers and mar%et analysis as some of
the spo%es.5 $his will be enabled by the
ERP application that is e+tended with
collaboration and social media tools. $he
ERP" ERP ii" and ERP iii functions will all
be integrated with new analytics and smart
source5 search methods to integrate and
synthesi#e trend" mar%et" and product or
service information. $his will close the loop
on the ERP ii innovation and will bring a
new customer focused business paradigm
into the enterprise that goes far beyond
today6s R- applications.
ERP iii state companies will be mar%etplace
disrupters who are agile" nimble" and
global. $hey will be able to spot emerging
trends and unmet customer demands (needs
or wants) far more quic%ly and with greater
ability than their peers. 3rom those trends
and customer needs these companies will be
able to quic%ly e+ecute innovation programs
to develop new products and services to
quic%ly fill those customer demands. $he
most advanced of these new disruptive
innovators5 will be the companies who can
intelligently synthesi#e all of the various
data points to understand customer demands
that are not even articulated.
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MaterialsResour!ePlanning
Unlike many other approaches and
techniques, material requirements planning
works which is its best recommendation.
Goseph &rlic%y" 14
'escri$tion
-aterial Requirements Planning is a time
phased priority,planning technique that
calculates material requirements and
schedules supply to meet demand across all
products and parts in one or more plants.
!hat is Material Reuirements
Planning* %ey question to a -RP process is the number
of times a company replenishes (or turns
around) inventory within a year. $here are
accounts of inventory annual turnover ratios of
greater than 100" mainly reported by Gapanese
companies. &ne can readily reali#e that the a
high inventory ratio is li%ely to be conducive to
lowering production cost since less capital is
tied up to unused inventory.
It is information system that translatesmaster schedule requirements for finished
products into time,phased requirements for
subassemblies" parts and raw materials.
In$uts to the MRP
S /ill of -aterials (/&-)
S $he -aster Production chedule (-P)
S Inventory record
%ut$uts from the MRP
S E+ported orders reports
S Planned orders reports
S &rder releases
"ill of Materials ("%M)
* record of all the components of an item"
the parent,component relationships" and
usage quantities derived from engineering
and process designs.
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*he Master Production Schedule (MPS)
* detailed plan that states how many E