As a part of Ultra Consultants’ mission to serve the needs of manufacturing and distribution teams looking for business transformation through technology, we regularly watch for surveys and reports relating to manufacturing technology.
A recent survey by Software Connect, MRP Software Buyer Trends – 2018 Report, focused on buyer needs and trends based on a random sample of 183 conversations with manufacturers looking for material requirements planning (MRP) software in 2017.
The survey results describe the MRP and ERP features manufacturers are looking for, their preferences related to on-site or hosted systems and whether they were replacing manual systems or upgrading existing technology.
Generally, most manufacturers agree that purchasing, forecasting and scheduling are an MRP software system’s most crucial functions.
MRP: Definition and Functions
MRP software includes production planning, scheduling, and inventory control systems used to manage manufacturing processes. Enterprises use MRP software to better plan stock resources, machine scheduling and labor loads.
Further, companies use MRP to calculate material requirements, coordinate labor and machine workloads, and forecast purchasing to meet customer demands, all based on the lead times of a supply chain.
MRP software is designed to assist managers in answering three fundamental manufacturing production questions:
- Which items are required?
- How many are required?
- When are they required?
MRP helps reduce inventory levels and associated carrying costs, determine material requirements to reduce shortages, and plan manufacturing functions, delivery schedules and purchasing.
4 Survey Takeaways
The Software Connect survey results suggest that all manufacturers, regardless of their industry and products, want MRP software that brings efficiency, lowered inventory levels and lowered costs.
The survey respondents agreed that purchasing, forecasting and scheduling were must-have functions in an MRP solution with a particular focus on improved planning. Enterprises are looking for systems that provide an extensive depth and breadth of functionality.
1 – Why MRP?
Manufacturers are generally looking for increased functionality for their existing technology solutions. Just under one-quarter of the respondents were first-time MRP software buyers.
In our work as manufacturing technology and ERP consultants, Ultra often encounters manufacturers and distributors needing to replace legacy MRP that no longer delivers the desired functionality.
In this survey, just over 14 percent were eager to replace a dated system. Another group of the survey respondents confirmed that they were consolidating multiple MRP systems with a single solution.
2 – Which MRP Functions?
More than 70 percent of surveyed buyers stated they were looking for MRP software solutions for purchase planning, demand forecasting, and master production scheduling. All of these tasks have a common denominator – they relate to visibility in the supply chain.
Manufacturers want to use MRP software to decide which assemblies must be built and when, using which materials, to meet customer deadlines.
According to the survey, more than half of purchasers were likewise looking for software with inventory reservation/availability, production cost reporting and item price/stock tracking features.
3 – Going Beyond MRP Functions
Confirming Ultra’s experience based on hundreds of engagements, the survey found that many manufacturers require both MRP and ERP solutions to gain tight control over production costs and profitability. They are looking for order management and core accounting options for AP, AR and GL.
More than half of the survey respondents identified capabilities for handling purchase orders as necessary, followed by modules for streamlining bank reconciliation, handling bills of material, and coordinating job costs. Manufacturing execution system and customer relationship management modules are likewise in demand.
4 – Hosted or On-Site?
The survey uncovered flexibility among the survey respondents regarding how they are willing to deploy and implement MRP software. Almost three-quarters of the manufacturers expressed openness to reviewing either hosted or on-site installation options, indicating they are not wed to one type or the other.
However, the Ultra team of business improvement consultants sees a great degree of confusion in the field regarding the understanding of cloud computing and hosting options as they relate to enterprise applications. This confusion stems primarily from key aspects that make cloud computing unique, including its methods of delivery, software upgrades and payment.
Survey respondents agreed that purchasing, forecasting and scheduling were must-have functions in an MRP solution.
The high percentage of mid-market executives that have explored or implemented cloud solutions validates the strength of this statement. Cloud solutions save money, reduce risk, and increase productivity potential and value realization.
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MRP Software – Ultra’s Take on the Survey
The Software Connect survey provides a useful level of insight to this key enterprise technology solution option.
MRP software gives manufacturers specific tools to maintain cost-effective inventory levels while lowering costs, identify appropriate material requirements, and coordinate manufacturing processes to meet customer requirements.
With choices related to MRP, and other enterprise technology options, it’s clear that manufacturers and distributors are finding it increasingly challenging to sort out their technology needs as they plan for growth while maintaining a competitive edge.
Contact Ultra for a specific look at business transformation processes coupled with independent technology selection services and implementation plan management capabilities.
As you evaluate MRP software and other systems, these services can jump start your business transformation journey to achieve new levels of competitive advantage.