Materials requirement planning (MRP)

The concept: you enter the customer order, then the computer--

Checks bills of materials for needed raw material

Checks raw material inventory for status

Writes POs for needed raw materials

Schedules job based on raw material lead times

Determines potential delivery date based on lead time plus manufacturing time

Tracks the movement and costs of job as it moves through production

Reports goods ready to ship

Produces packing slip and invoice for shipping.

Key components

Bill of materials processor = Required raw materials + Manufacturing steps

Inventory management w/ WIP

P.O. application w/ lead times

Shop floor scheduling

Inputs

New and updated bill of materials

Interfaces from other applications

Outputs

Open orders report (by order or by customer)

WIP reports

Job release ticket

Inventory pick slips

Shop floor schedule