CENT 1800 Optimizing Business Operations - MRP Effective

As a consultant working in the area of business analysis, you are expected to make recommendations to clients regarding the optimization of business operations, including production, material control, quality, and delivery. In order to convey a sense of professionalism, self-efficacy, and value to the client, you have decided to create a detailed report that outlines the key components of MRP to recommend or caution against the installation of an MRP system.

Since your services are rewarded primarily by the effective launch of MRP within the client’s organization, you want to define certain business characteristics that are likely to undermine or block the effective application of MRP so that you will recognize and avoid consulting agreements that carry a high risk of failure. Knowing in advance what these undesirable characteristics are puts you in a position to adjust your promise to deliver accurately or withdraw your name from the list of potential vendors for the client.

Include the following in your report:

A list of business operating characteristics that are best aligned with MRP (where MRP is most effective).
A list of operating characteristics that render MRP ineffective or undesirable (when should a client not implement MRP).
Benefits of implementing or improving MRP in an organization (list at least 15 key areas of expected improvement, such as reduced lead times).

Five selected items from your list of 15 expected improvements, along with descriptions about how a companion ERP (Enterprise Resource Planning) system might be used to link certain functional areas or operational activities to achieve and maximize each expected improvement effectively. 

Identify the functional area(s) that are favorably affected by the benefit.

Describe ERP data elements (types of information) that serve as inputs and outputs of the ERP and MRP systems.
Provide a real-world example that clearly reveals how the chosen improvement item influenced each functional area in one or more of these five key scorecard categories: Safety, Quality, Delivery, Cost, and Employee Morale.

Introduction

Optimization in business is the process of evaluating the efficiency, productivity and overall performance of a business. Process optimization includes minimizing the cost and maximizing the efficiency. The process is adjusted optimizing specific parameters without interfiling negatively with some constraint. In order to change the process, the company's assets should be maximized. The change of the process is about a change of the systems, the designs and the decisions. The goal of the optimization process is to maximize more than one of the process specifications while keeping the rest contained in their checks (Olhager, 2013). This paper provides recommendations on business optimization process.

Operating characteristics aligned with MRP.

Material requirements’ planning is a computer-based inventory system that is intended to assist the production administrators. It helps in scheduling and placing of orders of items of dependant demands. They are driven by outstanding orders that ensure there are enough inventories of demand items for them to meet the requirement for production. MRP help in the inventory levels to reduce the level of constituent parts and the raw materials inventory (Navazo, Méndez, and Peiró, 2014). This way they are able to ensure that there are low inventory levels so as to ensure there is minimum capital that is tied up in inventory reducing the carrying cost.

MRP is effective in economic ordering. Lot sizes are revealed exposing the items and the raw materials that should be purchased for each of the components. With the production demand in the account, the transportation costs, the quantity price breaks and the carrying cost are determined accurately.

It is also effective in purchasing planning. The managers are able to access and tell what inventories are needed to match the increased demand on the ready products. Increase in inventory comes with the demand for warehousing requirements (Dolgui, Ammar, Hnaien, and Louly, 2013). Such information on the inventory requirements guide the managers to create and plan for future adjustments and expansion of the facilities.

 MRP is effective for production planning. The availability of raw materials determines the rate of production. The pace of the production of the finished good depends mainly on the availability of raw materials. In a case of shortages, the MRP identify them early enough. The production managers shift the production assets to manufacture the items that materials are available.

Operating characteristics rendering MRP effective

In work scheduling, the MRP has a system that gives perfect knowledge of the availability of the inventories for the production process. The work crews are scheduled properly by the by the managers where they are set to meet their specified needs. The crews can be divided and sent at different shifts in the production line (Meyr, Wagner and Rohde, 2015). The production is done properly dealing with the overstaffing in the line of production.

The MRP systems support the customer service. The systems collect comprehensive and accurate data on the customers' demands. The demands of the customers are more accurate and these representatives of the customer service issue their customers with the accurate delivery order dates.

Enterprise resource planning is software in the business management process that helps to manage the business making the office functions to relate to the technology, the services, and the human resource. All the companies have an aim to improve their business processing. ERP applies mostly to large companies. It would be challenging for small companies. There are several benefits and advantages that companies enjoy using enterprise resource planning.

Benefits of implementing MRP in an organization

The advantage of using the ERP is that they are designed according to the specific needs of the different kinds of organizations. There are several ERP soft wares that are in competition in the market currently. The ERP software is set to meet the needs of a healthcare facility while there are others that are set to meet the specification of the retail store.

A major benefit of using ERP software enables the manager to control businesses with one system. The core business is put under one system that the information is simple to access and manage. An example is the manufacture of the ERP systems. They consist of many functional facilities (Choma, Quintale, AM Zaina, and Beraldo, 2015). Their facilities hold information on finances the manufacturing process, quality and sales yet they are all placed under one system. The information is integrated which is a future that enables them to communicate with each other.

Items linking with Enterprise Resource Planning

ERP has the ability to keep up to date. This is an advantage to the company. This is because technology has the tendency to advance quickly. It saves the company the cost of updating the programs since the cost for programming piles up quickly. Most of the companies do not have space for the old systems. That way they practically and financially migrate from the old systems to the modern ones. The art technologies have trends and patterns that allow companies to make better solutions (Duan, Faker, Fesak and Stuart, 2013). They come up with more reliable decisions that are in a more competitive edge. They have to struggle with the developments and the advancement so that they can remain in the competitive market. They are forced to reposition themselves for growth since the business needs to be run in more modern systems.

The companies are able to streamline their processes. They take no chance in the consideration of workflows and business process. Running the ERP system in a business they are able to improve on their speed. Information is more accurate on the operations of the business (Ladewi and Mulyani, 2015). The business is made more efficient which is the aim for every business and every person. This also improves the morale of the employees. They tend to become more productive when they are happy. The company’s labour costs are reduced; the working speed is increased, the productivity increases reducing the time that was spent in production, which is a success for the company.

Functional areas of Enterprise Resource Planning

Business data analysis is facilitated by the ERP. The ERP analyses the company's data which is valuable to the company. Using ERP the peak seasons are recognized easily and the low seasons are identified. It is easier to learn about sales. They transform the method that is used in gathering and analysing the information helping in the recognition of accurate insights into the entire data more quickly. ERP offers real-time data on business resources and work progress (Aghajani, Samadi and Samadi, 2014). That ensures that the user is updated with the latest information that is more accurate and relevant.

The companies have to invest heavily in technology so as to meet the high expectations of the customers. The ERP software has a centralized communication tool that covers the entire department (Sowan and Tahboub, 2015). This gives the global vie for the communication of all the customers. The communication with the customers is effective such that in case the customer needs to review past communications and orders the customer's transactions history and service history can easily be accessed.

Conclusion

ERP is a system that many advantages and has several benefits. It is most effective to the large companies. It can be used by all kinds of companies and organizations due to its original and beneficial feature (Huang, and Handfield, 2015). They help improve the companies' productivity, reduce the cost of production. Help in monitoring the progress and keeps all the information about the organization of the company up to date. There is good communication that runs from the company to the consumers which are not only an advantage to the users but also to the consumers.

References

Aghajani, H. A., Samadi, H., and Samadi, H. (2014). Feasibility Study of Enterprise Resources Planning (ERP) Systems' Implementation (Empirical Evidence: National Iranian Oil Petroleum Diffusion Cooperation (NIOPDC)–Sari Zone). Journal of Information Technology Management, 6(2), 161-186.

Choma, J., Quintale, D., AM Zaina, L., and Beraldo, D. (2015, April). A perspective-based usability inspection for ERP systems. In Proceedings of the 17th International Conference on Enterprise Information Systems-Volume 3 (pp. 57-64). SCITEPRESS-Science and Technology Publications, Lda.

Dolgui, A., Ammar, O. B., Hnaien, F., and Louly, M. A. (2013). A state of the art on supply planning and inventory control under lead time uncertainty. Studies in Informatics and Control, 22(3), 255-268.

Duan, J., Faker, P., Fesak, A., and Stuart, T. (2013). Benefits and drawbacks of cloud-based versus traditional ERP systems. Proceedings of the 2012-13 course on Advanced Resource Planning.

Huang, Y. Y., and Handfield, R. B. (2015). Measuring the benefits of ERP on supply management maturity model: a "big data" method. International Journal of Operations & Production Management, 35(1), 2-25.

Ladewi, Y., and Mulyani, S. (2015). Critical Sucess Factor For Implementation Of Enterprise Resource Planning System ERP Survey Bumn Companies In Bandung. International Journal of Scientific & Technology Research, 4(5), 74-80.

Meyr, H., Wagner, M., and Rohde, J. (2015). Structure of advanced planning systems. In Supply chain management and advanced planning (pp. 99-106). Springer, Berlin, Heidelberg.

Navazo, J. M. V., Méndez, G. V., and Peiró, L. T. (2014). Material flow analysis and energy requirements of mobile phone material recovery processes. The International Journal of Life Cycle Assessment, 19(3), 567-579.

Olhager, J. (2013). Evolution of operations planning and control: from production to supply chains. International Journal of Production Research, 51(23-24), 6836-6843.

Sowan, I. K., and Tahboub, R. (2015). ERP systems critical success factors ICT perspective.