NetSuite Insights: Understanding Its Role in MRP

05 February 2024 - Business Solutions

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NetSuite Insights: Understanding Its Role in MRP

Manufacturing Resource Planning (MRP) software is crucial for manufacturers to efficiently plan production. MRP helps optimize inventory, purchasing, production scheduling, and more. As a leading ERP platform, NetSuite is commonly used for MRP, but how exactly does it support key MRP functionality? Here we break down NetSuite’s MRP capabilities.

What is MRP?

MRP stands for Manufacturing Resource Planning. It is software designed to improve production planning by:

Forecasting demand
Scheduling factory production
Planning inventory levels
Coordinating purchasing and delivery of components
Optimizing use of manufacturing resources

The goal of MRP is to ensure needed raw materials and components are available when required in the factory. This enables efficient production to meet customer demand.

NetSuite’s MRP Module

NetSuite offers a native MRP module to enable production planning. Key MRP-related functions include:

1. Demand Forecasting: The system analysis historical sales data and seasonality to predict future demand. This information feeds the rest of the planning process.

2. Inventory Optimization: NetSuite’s inventory management tools like order point planning help determine ideal stock levels across components. This ensures availability of needed materials.

3. Production Scheduling/Planning: The MRP engine schedules production based on the demand forecast and component availability from inventory. The output is a detailed production plan.

4. Purchasing Coordination: Purchase orders are generated to replenish stock of components and raw materials according to the production schedule. This synchronizes purchasing with manufacturing requirements.

By coordinating these activities, NetSuite helps optimize inventory costs while enabling on-time completion of finished goods based on demand.

Benefits of NetSuite MRP

There are a number of key advantages to using NetSuite’s integrated MRP solution:

Improved efficiency – With a centralized system, all departments have visibility into the same forecast, schedule and stock data. This streamlines planning and purchasing.

Optimized inventory – Balancing supply and demand for components reduces excess stock while preventing shortages.

Enhanced agility – When demand changes, the system rapidly adjusts purchase orders and production plans to adapt.

Greater scalability – As production volumes grow over time, NetSuite readily scales up to accommodate increased complexity.

By providing robust, built-in MRP functionality, NetSuite enables manufacturers to achieve more precise alignment of materials procurement and shop floor activities – leading to maximized throughput and profitability.

Alternative Solutions

While native to NetSuite, there are stand-alone MRP tools that can be integrated:

Sage Business Cloud MRP – Manufacturing and inventory management solution natively integrated to Sage 100 and Sage 300.
Fishbowl Manufacturing – Specialized MRP system for small to midsize manufacturing organizations looking to streamline production and planning.
Global Shop Solutions One-System ERP – Integrated ERP system providing deep MRP functionality together with CRM, accounting and other manufacturing management tools.
Prodsmart – Cloud-based MRP software focusing on production scheduling, capacity planning and inventory optimization for makers of custom engineered products.

So while NetSuite delivers robust capabilities for companies needing an integrated business management platform, standalone tools like these provide specialized functionality that can enhance certain elements of MRP.

Conclusion

NetSuite is commonly adopted by manufacturers due to its native MRP module tailored to production environments. By handling demand forecasting, inventory planning, production scheduling and procurement, NetSuite provides comprehensive optimization of shop floor and supply chain activities. For many companies, it represents a scalable, unified system to improve product assembly and order fulfillment efficiency as volumes grow over time.

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