Operations Management: An Integrated Approach, 5th Edition

RESOURCE PLANNING ACROSS THE ORGANIZATION

Since MRP determines the quantity and timing of materials needed, it affects several functional areas in the company. Let's first look at how each functional area is affected by MRP and then consider the effects of ERP.

Accounting calculates future material commitments based on MRP output. Accounting then develops cash flow budgets and the inventory investment to support the current MPS. With a common database, accounting should be able to determine the exact status of outstanding orders, including cost, quantity, and delivery date. Since there is a common database, discrepancies between supplier and manufacturer should be reduced.

Marketing is primarily concerned with the MPS, which identifies when finished goods will be completed. MRP reveals potential material shortages that directly affect marketing since the shortages may delay product completion. Marketing can also use MRP for allocating scarce materials to maximize customer service. One major advantage of ERP is that marketing can track actual sales at the final product level (using POS) to determine what actions, if any, need to be taken to maximize customer service.

Information systems ...