Material requirements planning and your food and beverage ERP

Warehouse with crates of items.
Materials requirement planning helps companies plan for anticipated demand and order accurately at the right time.

An enterprise resource planning (ERP) solution provides food and beverage manufacturers with ample opportunities to improve operations. With integrated functionality across the enterprise, a process manufacturer can automate processes and drive down costs.

With a food ERP, a company can take its material requirement planning (MRP) functions to a new level. By integrating inventory management, production scheduling, material ordering, and financial tools into one cohesive platform, companies can use MRP functions to their fullest.

When it comes to material requirement planning and your food and beverage ERP, understanding capabilities and needs is paramount. As seen in the recent post, Comprehensive guide to key ERP functionalities in food and beverage, it’s a critical component to your selection process.

MRP Basics

While MRP has been around since the 1960s, the growth of ERP solutions has brought the practice into closed focus. By harnessing the computing power of an ERP solution, companies can change the way production is managed.

MRP relies on sales projections and information on inventory and available products. It begins with an assessment of the bill of materials, which details the ingredients and quantities necessary for production.

Next, MRP looks at existing inventory and the availability of required ingredients, along with the master production schedule. MRP tools calculate what materials are necessary and when they’ll be needed.

Knowing what’s needed, how much is needed, and when it’s needed helps companies in several ways:

  • Optimizing inventory levels to reduce waste
  • Better prioritizing of production
  • Responsive planning to meet changing customer demands or consumer tastes
Factory with food being processed.
Sound MRP functions help to ensure that production is optimized.

MRP needs in your ERP

When you’re looking to purchase or upgrade your ERP, there are several important factors to consider when it comes to MRP. You want a system in place that has the features that will impact your production planning, including:

  • Inventory guideline management features that keep inventory levels optimized while meeting demand
  • Lot tracking and tracing to ensure that ingredients are used prior to expiration, reducing waste and promoting food safety
  • Master production planning tools to coordinate the scheduling of machines and personnel. These tools should include routing information, capacity data, delivery deadlines, and purchase and sale order management.
  • Business intelligence that that forecasts likely demand, analyzes trends, and reviews order patterns
  • Visibility tools that manage work in progress to resolve production slowdowns or stoppages
  • High-level, real-time analytics that provide stakeholders and other employees with insights and allow for better decision-making in the moment of need

To maximize your investment and the use of your MRP capabilities, your company will want to be sure to develop the following practices:

  • Data integrity. Your food ERP solution is only as good as the data that it uses. Data input is critical to ensuring that the analytics tools and reporting are reflecting the true picture.
  • Warehouse management. You need policies, which can be programmed into your ERP, to ensure that ingredients are used at the optimal time to reduce spoilage and waste.
  • Forecasting focus. Many food and beverage companies face demand fluctuations throughout the year. Use historical sales data to help target demand more accurately throughout the year,
  • Vendor management. Your supply chain is critical to your success. Auditing your vendors to ensure that they are providing you with what you need when you need it is a critical component of production accuracy.

At NexTec, we help companies identify their ERP needs, assess and identify vendors, and install solutions that make an impact. Download our guide to better inventory control. to see how NexTec can help your company find the right ERP solution with MRP functionality.

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