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What does MRP include, and why it is so difficult to achieve the result?

In order to calculate what material is required and when an order can go into production, the Material Requirement Planning process takes into account information on the Bill of Materials (BOM), production plan, and material plan. Let’s see how it works in Streamline software.

Streamline allows you to generate a plan of material requirements based on the demand forecasts of finished products and a bill of materials (BoM).

A bill of materials is a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts, and the quantities of each needed to manufacture an end product.

In Streamline, to view the imported bill of materials, go to the menu Item - Bill of materials - Entire bill.
The first level of the tree shows codes of finished products, and the indented ones, the codes of their components and the quantity required to build the products (the quantity is indicated after the × symbol).
Streamline can also calculate the amount of each material and intermediate item needed to build the finished product. To view this information, select the finished product in the Tree view and go to the menu Item - Bill of materials - Material tree.

A material requirements plan is calculated based on the demand forecasts of finished products. Here is the basic workflow you can follow when planning material requirements:
Generating, viewing and approving the forecasts
Analyzing and Adjusting the material requirements plan.

To generate the forecasts and plan:
Set the forecast Horizon to the number of time periods to forecast.
Configure the As of parameter.
Click the Forecast button.

Viewing the forecasts. The forecasts are shown on the Demand forecasting tab. Streamline builds forecasts for Finished items.

Approving the forecasts. As long as the forecasts have been generated, it’s time to approve them.

Analyzing Material Requirements Plan. To view the material requirements plan, go to the Inventory planning tab. The tab shows a table that contains the material requirements plan, production plan, and purchase plan. To see them located one under another, sort the table by the Type column. The Type column indicates the item type described earlier. If an item has an empty cell in this column, it is considered as a regular SKU which is not involved in manufacturing and is only purchased and sold. Streamline generates a purchase plan for such items. To show the entire plans which include all forecasted periods, go to the report settings and check the Show entire ordering plan option.

The Purchase plan section of the table shows how much you should order (purchase plan and material requirements plan) or produce (production plan) by the first day of each period. To quickly recognize the Production plan in the table, the Type column and Order now section are colored blue for produced items.

Adjusting Material Requirements Plan. Inventory planning has a set of parameters that can be adjusted. Finished and Intermediate items have the parameters: On hand, qty to receive, delivery date, pending sales orders, service level, shelf life, shelf life exceeding, safety stock. Together they make up a Production plan.

Streamline is very flexible when it comes to exporting reports. Actually, you can export any table that is shown in the Inventory planning tab to an Excel file. The table can be customized to include only necessary columns in the inventory report settings before the export. Let’s export the plans by clicking the Export report button of the toolbar.

On the Demand forecasting tab, you probably noticed green and red flags near the items. We called it a Money tree that shows overstock and stockout in the set currency on the items level and on the category level as well. The Money tree helps to understand the cost savings in eliminated stockouts and frozen capital that Streamline brings. Such savings would easily be multiples of the cost of the application and the application may hopefully be approved in the company.

So, we covered the whole process of how to do MRP in Streamline. Done properly, material planning ensures that manufacturers have the right quantity of materials at the right time for production to take place. Using Streamline software this process becomes easier to manage and keep an eye on the results.

Time stamps:
0.00 - Production Plan & Material Plan. How its works at Streamline
2.10 - How to generate forecast
3.36 - Production Plan
4.05 - How to export a report
4.47 - Money Tree

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