Material requirements’ planning is very important to firms which deal with manufacturing operations. According to Rushton et. al. (2000, p 170-174), it is a process which ensures that products and materials which are required for production are available. It is also a process which ensures that products and materials required for transportation and delivery of products to customers are available. This process is mostly undertaken through the use of computer software, though it is currently done manually by a few manufacturers.
There are several processes which are undertaken when implementing material requirements planning and some of them are discussed below. Processes of material requirements planning. Creation of a time phase schedule. This is a schedule which is created to act as a guide on explaining the method and units which are to be produced. This schedule also explains the time taken to produce the products and the period when they are produced. This schedule is prepared after analyzing the market demand and inventory levels.
It acts as a guide in implementation of material requirements planning. Creation of a bill of material. According to Kusiak (2000, p 179-184), this is the assigning of a unique number which is used to identify the materials
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Creation of part numbers. According to Orlicky and Plossl (2000, p 37-39), these are numbers which are used to identify inventory items. It serves a purpose of making each item unique and easy to identify through assigning the part number. It is important to assign different numbers to parts which have different functions, fit or form, especially if they cannot be interchanged. Open purchase order and manufacturing order tracking.
These are two separate processes, and they are implemented to track the manufacturing process of individual products which are being manufactured. They also track the purchase process by the customer in relation to payments. The major purpose of these processes is to match payment and manufacturing process in order to tell whether individual products will be processed on time, according to the purchasing schedule of the customer. There are several problems which this system helps to solve and some of them are discussed below.