MRP Systems for Manufacturers: The Ultimate Guide

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You need to adopt an MRP system. But, with so many MRP systems on the market, and different iterations, where do you even begin?

Your sales are starting to increase, and so too does your workload. Times are great, but with sales and manufacturing orders piling up, you start to realize that tracking your inventory, production, and sales manually will not cut it anymore.

That's why we’ve put together this epic guide on what is an MRP system, which is the best software for you, and how to choose between MRP and ERP systems.

What is a MRP System?

Why is an MRP System Important?

Key Differences Between ERP and MRP?

How to Choose the right MRP System

MRP Systems for Small Business?

Taking the next step

1. What is a MRP System?

MRP (or material requirements planning) systems are tools for calculating the raw materials, sub-assemblies, and components a manufacturer needs to create a product.

MRP systems perform this task following three steps:

Monitoring the current level of raw materials and components on hand;
Understanding which inventory is low and needs reordering; and
Scheduling the production or purchasing of those materials.

When it comes to answering the question of what is MRP system and how they work, that’s it in a nutshell.

However, although it appears to be this way, MRP systems aren’t considered to be lean production and are considered by many practitioners to be antithetical.

But that doesn’t mean they don’t go hand-in-hand!

So that’s everything you need to know about what is an MRP system. But what does it mean in terms of manufacturing?

What Is MRP in Manufacturing?

What is MRP system for manufacturers is a piece of software used for automating their production, scheduling, and inventory.

Though this definition, especially for MRP systems in manufacturing, has changed over time since there have been big strides in technological advancements in this area.

Traditionally, MRP systems used to be considered a “Pull” type of production system. However, as the software and technology improved, capable MRP systems became able to support all types of production workflows:

Make to Order (MTO);
Make to Stock (MTS); and,
Assemble to Order (ATO).

That means the MRP systems of today allow growing manufacturers to be flexible with their production lines, to change up their production speed depending on the different challenges they encounter.

So, we’ve already touched upon this a little bit. But, how exactly does an MRP system work in

manufacturing?

How Does MRP Work?

The way earlier MRP system iterations automate these areas and meet demand efficiently is by following the bill of materials (BOMs) of a manufacturers product, which details:

The raw materials, subassemblies, and components used;
The quantity of these items;
Total costs; and,
Operational steps.

The BOMs will highlight the relationship of the items that go into making your product as either parent or child. The finished goods as the parent item, at the top of the hierarchy.

What is an MRP system? A tool for handling your raw material, WIP inventory, and finished goods.

But, the MRP’s of today use inventory data and your master production schedule (MPS) to automatically calculate how much material you need and how much your manufacturing process will use.

However, back to inventory types, as the inventory items within your BOM are classified as one of two things:

Independent demand; and
Dependent demand.

Dependent Demand

These are the items you need to make your finished goods, the raw materials, and components. The demand for these items will all depend on how much is needed to make the next level component in the BOM hierarchy.

Independent Demand

This is essentially your finished goods, as the amount you need is all determined by several factors such as:

Market demand;
Sales history; and
Forecasted demand.

To help manufacturers track and manage all these dependencies and figure out how many items are needed by the specific dates within the master production schedule, most turn to MRP systems to achieve this task.

Another element of understanding what is an MRP system is how they track lead time.

There are two common types of lead time manufacturers concern themselves with, and that’s:

Material lead time – the ordering and delivery time of materials; and
Manufacturing lead time – the time it takes to make finished goods and ship them to the customer.

MRP systems automatically estimate these lead times for you, by using the information provided with your BOM and MPS.

And that’s the basics of how MRP systems work. But, as we already mentioned, MRP systems have evolved over the years since their inception, so what type of MRP systems are available on the market today?

What Are MRP I and MRP II Systems?

Let’s cut straight to the chase. Everything we’ve mentioned above is MRP I, but to condense that quickly:

What is an MRP I System?

MRP I (or Material Requirements Planning) is a tool for using different inputs, like:

Material costs;

Material availability;
Expected demand;
Forecasted demand;
Staffing ability; and
Machinery capacity.

And using the data to calculate if you have adequate levels of material, labor, and machinery to meet market demand or reach company production goals.

MRP I System Features:

Inventory control;
Bill of materials (BOM); and
Master production scheduling (MPS).

It doesn’t get any simpler than that.

But as we already mentioned earlier, as the technology improved, the functions an MRP system performed increased, and lead the way to a beefier system, dubbed an MRP II system.

MRP and ERP systems come from the same family of software, but perform different functions.

What Is an MRP II System?

An MRP II system, unlike its predecessor, stands for Manufacturing Resource Planning as this improved system includes the original functions of MRP I, but integrates other business applications too, including:

Advanced demand forecasting;
Machinery capacity scheduling;
Quality assurance; and
General accounting.

The MRP II system quickly replaced the MRP I system as it provides the same features but also incorporates real-time functionalities given you a tool to centralize your logistics, marketing, and general financing.

MRP II System Features:

Inventory control;
Bill of materials (BOM);
Master production scheduling;
Equipment maintenance scheduling;
Accounting and financial planning; and
Forecasting demand.

So, there you have it, the differences between MRP I and MRP II system.

Next, let’s look into the importance of MRP systems for your business.

PRO TIP: Why not take an MRP System for a test drive to see how it will improve your production line?

2. Why is an MRP System Important?

Now you know everything there is to know about what is MRP system. But now it’s time to delve into just exactly why it’s important for manufacturing businesses (especially direct-to-consumer manufacturers) to get set-up with either an MRP I or MRP II system.

But, firstly, what is the purpose of adopting an MRP system into your business?

Well, the goal of MRP systems is to:

Minimize manufacturing lead times;
Optimize inventory levels; and
Maximize service levels to boost business efficiency.

An MRP system is going to give your business the real-time visibility you need to see inventory requirements to meet demand, help you maintain optimal inventory levels, and design the best production schedules.

Without these functions, your business is going to be playing catch up from having the adopt manual systems instead, such as inefficient Excel spreadsheets, which will lead to issues such as:

Ordering too many raw materials that will increase carrying costs and tie up capital from overstocking;
Stockouts from underordering materials and components, which will make you miss deadlines and driveaway sales; and
Create bottlenecks and cause disruptions, increasing your manufacturing costs, and decreasing your output.

At first, handling your production planning and scheduling will be fine as you’re just starting out. But as companies begin to grow and start manufacturing on a larger scale, many turn to MRP systems, not just in manufacturing but in over industries too, to create a perfect balance between supply and demand.

A Scenario of the Importance of MRP Systems in Manufacturing

Let’s imagine you’re a bicycle manufacturer. Your MRP systems basically perform like in ventory management system which, will streamline your production schedules and help you place orders for your dependent demand.

A bicycle manufacturer needs to keep track of multiple dependent demand items including, aluminum pipes, tires, seats, bicycle gears, etc.

An MRP system steps up by being able to answer questions automatically and immediately to help you know when you can initiate a production run, such as:

The components you need in terms of inventory;
The quantity you’ll need; and
When the components are needed.

For the bicycle manufacturer, the MRP system matches the flow of materials and, in the order they follow along the manufacturing route, depending on the availability of the preceding dependent demand.

This allows the manufacturer to understand what’s missing, the lead time for each product, and any bottlenecks forming on your production line.

The Benefits of Adopting an MRP System

So, as you can see, the importance of an MRP system is to automate your production flow and to have your lead times calculated and scheduling completed automatically.

But, MRP II systems don’t stop there. Once you get set up with the software, here is the list of other benefits you can enjoy:

Stock Ideal Inventory Levels

Reduce the amount of inventory you hold while tracking your production. An MRP system allows you to avoid holding the materials and components that aren’t often used in production. Providing you with more space to store your more important items so you have the peace of mind knowing you can easily avoid stock shortages.

Purchase Planning

While on the topic of maintaining ideal inventory levels, the benefit also passes over to your purchase planning. An MRP system is going to tell you exactly what you need to order and when you need to order it.

Knowing this information in real-time will allow you to improve your supply chain management. But give you and your managers the information needed to meet product demand and plan future expansions.

Production Planning

As we have explained, keeping track of your production flow and your dependent demand inventory levels is a tricky one.

MRP systems highlight stock shortages and reorder points so you can order material immediately and reallocate your workflow, machinery, or labor for alternative jobs with what you currently have in the meantime.

Work Scheduling

MRP systems save you the headache of figuring out production schedules by automatically doing it for you. This allows you to easily delegate work, increase or decrease your workforce, and understand the deadlines of all your projects.

Reduced Costs

From reducing your carrying costs to saving money from avoiding overtime with improved analytics.

MRP systems give you the power to reduce costs across the board, allowing you to better understand your cost of goods sold and manufacturing costs, meaning you can save money.

Better Service to Customers

Finally, by using MRP systems to improve all of the above, you’ll be able to better deliver on your deadlines and the reduced costs allow you to pass those savings onto your customers.

And that’s everything you need to know about what is an MRP system and the importance of getting it up and running in your business.

However, earlier in this article, we briefly touched on another system known as ERP. So, before we move onto how to choose the right system for your business, let’s look into a comparison of MRP and ERP systems.

3.Differences Between ERP and MRP Systems

When manufacturers realize they need to incorporate some sort of process automation software into their business, they stumble across ERP and MRP systems.

And, if you look into them, you’ll notice that it can be difficult to see the difference between the two systems.

That's why we've outlined the differences for you. and how MRP systems can benefit your small business.

What is an ERP System?

Before even coming across the term MRP, people often come to ERP first. It can be confusing, to get to grips with when pitting ERP vs. MRP systems.

An ERP (enterprise resource planning) system is a tool for manufacturers looking to take control and integrate the important areas of their business.

ERP systems are important for larger corporations with over 500 employees, as it allows users to implement improved resource planning by centralizing all your important processes onto one piece of software.

Meaning, if you adopt an ERP system into your business, you’ll be able to integrate your:

Planning;
Purchasing;
Sales;
Marketing;
Finance; and
Human resources.

Are your eyebrows furrowed yet?

We understand your confusion, as borders between the systems (MRP/ERP systems) have melted away, and the biggest difference between them all is the scale or their implementation. Though we’ll look into the differences between ERP and MRP systems a little later.

What Are the Disadvantages of ERP systems?

Even though on paper the differences between MRP/ERP systems seem to be non-existent, the major difference, and also the disadvantage of using an ERP system, comes down to the sheer scale of implementation.

Traditionally speaking, ERP systems are usually localized within a business and custom-built for large scale manufacturers who need to connect together different areas of large or multiple manufacturing plants.

This means an ERP system for small business manufacturers will be too complicated, cumbersome, and expensive to implement.

So, what exactly are the disadvantages of using ERP (especially in terms of an ERP system for small business):

Installing an ERP system is extremely expensive. Some estimates put this at $75,000 to $750,000 for small businesses.
Complicated systems that require extensive training and educating your workforce.
The size and scale of ERP systems make them difficult to use.
Lacks flexibility for small businesses with difficulties to upgrade, customize, or integrate with other tools.

However, the nature of manufacturing is changing: scaling the capacity in small autonomous units, T-shape focus on value creation (manufacturing in our case) along the value streams, cloud software adds digital brand management, multi-channel sales, etc. to the mix.

Which brings us to our next topic.

What is MRP compared to ERP?

You won’t usually find an ERP system for small businesses, as they’re designed for large corporations who operate internationally and have a huge amount of resources to manage.

MRP systems on the other hand give smaller manufacturers the chance to incorporate automation into their business, without throwing all their money at implementation and bespoke software.

When you look at the systems side by side, you’ll begin to understand that ERP came to be by taking MRPs core features and adding a lot more functionalities.

For example, with ERP, you can handle:

Supply chain management;
Customer relations;
Core finances;
HR;
Project management; and
Automated marketing.

They make ERP systems seem more appealing since you can hold all your eggs in one basket. These systems are also tailored for each company to help them achieve their goals.

But this also tends to make ERP systems incredibly complex, specific, and expensive.

Because ERP systems are this big, it makes it almost impossible to personalize systems or integrate new tools, which later bogs down businesses as they’re stuck with technology that eventually becomes outdated.

The biggest difference between ERP and MRP systems is the amount of data-handling that system performs.

And although it won’t be ideal to get set-up on an ERP system immediately, once your business begins to expand and begins operating in several locations around the globe, choosing between an ERP and MRP system will become obvious.

TRY KATANA MRP SYSTEM FREE FOR 14 DAYS

What is an MRP system? A tool to help you manage: inventory control, bill of materials (BOM), and master production scheduling (MPS).

MRP vs. ERP: Which one is right for you?

ERP systems offer solutions that are tailor-made for the complexity of corporations that require heavy-duty data management.

So, why not go for what the big players have got? Because clearly, they must know the best right? Well, they might know what’s best for them, but not what works best for you.

ERP software is incredibly difficult to implement, and a greater issue is that they cost upwards of 25,000 dollars a year.

As a modern manufacturer, that’s a lot of money to spend on software.

This is why you want to stick to MRPs, which have been designed for similar purposes as ERP but on a smaller scale, with the features that you need.

MRP systems also offer heightened flexibility to grow with you, with integration opportunities and scalability.

Not only that, but MRP systems like Katana MRP are powerful yet simple. This means there is no need for intensive training when using a system designed by manufacturers, for manufacturers.

4.How to Choose the Right MRP System

Here are the key factors that you should consider priorities when choosing the right MRP system for your small manufacturing business.

Until recently, manufacturers had been stuck between a rock and a hard place.

On the one hand, was the choice of working with overly complex webs of inefficient Excel spreadsheets, and on the other were the expensive ERP systems of the big players.

It’s not been an easy ride.

Thankfully there are now affordable Manufacturing Resource Planning systems (MRP) available to meet the needs and budgets of growing manufacturers.

Most businesses implement MRP software when they want to rid themselves of the back and forth between overly complex webs of spreadsheets.

But there are plenty of other advantages to MRP, all depending on which one you go for. They can offer benefits ranging from optimal inventory control to implementing better production planning strategies and more.

That doesn’t mean that all the systems on the market are worth your time though.

Here are 7 key factors that you should consider as priorities when choosing the right MRP for your manufacturing business.

1.Taking Control of Your Inventory Should be a Priority

A good MRP keeps track of your stock. An exceptional MRP gets your inventory to optimal levels.

What you want is software that’s going to provide you with live inventory control that guides you in making purchases at the ideal times. This way the benefits of achieving optimal inventory are twofold:

Excess stock is reduced, which cuts on carrying costs; and
You won’t run out of stock, so no more delayed deliveries.

That means you need to look for software that manages raw materials and products, sets reorder points for when they are low, and has the capability to make stock adjustments in real-time.

If all these features are present, you’re onto a winner.

2. Strong Production Planning Capabilities are Key to MRP

Production planning processes and resources is a two-sided coin.

Both heads and tails need to be balanced to achieve maximum efficiency.

One side of the coin is finding an MRP which will help you schedule your operational and human resources. This means that your team are focused and do not get overwhelmed, while your machinery won’t be double-booked.

Scheduling tasks for your team might not be something you expect from an MRP, but human resources are as critical to your operations as your material resources.

The other side of the coin is prioritizing your productions. A smart production scheduling software will give you the control to rank manufacturing jobs whilst automatically considering the material availability.

Make sure that both sides are covered. That way you can save money by keeping an efficient schedule and are also able to make changes to your production according to demand.

3. Find Software that Gives You Accurate Costing

One of the most desirable features of MRPs is production cost reporting, and there’s a good reason too.

Keeping track of your costs can be mission impossible using spreadsheets, especially if the cost of raw materials is not consistently stable.

Finding the right MRP can help you gain accurate costing, and this in turn will allow you to make better pricing decisions that are based on real product margins.

There are two key aspects to look for:

The capability to create multi-level product recipes with sub-assemblies; and
Product recipes that track manufacturing costs as well as the cost of materials.

Having both elements will give you a complete and up to date bill of materials so that you can sell products at the right price.

4. Get Complete Order Fulfillment Cycle

MRP systems should make your life easier.

The more elements your order management system covers the better.

Look for software that makes sales, production, and inventory one seamless flow. This is going to maximize the use of the system and reduce the amount of work you have to do as more features will be automated.

MRP systems that have a complete order fulfillment cycle are going to give you the flexibility to make to order or make to stock depending on your manufacturing needs.

So, if you have a dedicated sales team, for example, they can then use these tools to create orders themselves. On top of that, they will know the completion dates without having to be in constant communication with your production team.

The perfect solution is a system that integrates your entire workflow from a single dashboard.

TRY KATANA MRP SYSTEM FREE FOR 14 DAYS

What is an MRP system? A tool to help you manage: inventory control, bill of materials (BOM), and master production scheduling (MPS).

5. Look for the Important Integrations

Most scaling manufacturers use multiple online services to meet their needs, whether it be for accounting or sales.

Ideally, you want to find an MRP that integrates with a solid e-commerce platform like Shopify and accounting software like QuickBooks.

That’s going to make a critical difference to the manufacturing seller, as it means that you have full visibility of stock, production, and sales.

6. Friendly Face Matters

One of the beauties of having an MRP system is that it can be used by different members of your team while reducing miscommunications between them.

That’s why you want software that is understandable by all the people who use it.

Whether you’re someone that uses it every day or only needs to check on things once in a while, the interface should be friendly enough to be accessible to both.

This might seem superficial, but the reality is that if a system looks simple then there’s probably been effort put in to make it easy to use as well.

It will reduce a lot of anxiety in your company if you go for a colorful solution rather than a mind-numbing program that looks like it jumped out of the ’90s.

7. Go for Cloud-Based Software If You’re Looking to the Future

As well as it being user-friendly you also want your MRP to be accessible anywhere by anyone. Cloud manufacturing software means that anyone in the business including yourself can have full visibility no matter where they are.

Let's say for example your production manager goes away for a week-long conference. As long as they have internet access, their trip will not disrupt your business workflow.

Remote work is on the rise, and this is a solution that gives your team the flexibility to work away from the office.

5. MRP Systems for Small Business

The big decision for small manufacturers, how do you go about choosing software from a large collection of MRP systems for small businesses available on the market today?

Well, first things first, you’re going to want to research the market to determine which software gives you the tools you need to manage your business.

To get you started, there are software review sites, such as Capterra or Software Advice, that provides ratings of software based on customer reviews and even have their own top choices lists. For example:

Capterra’s Top 20 MRPs List; and
Software Advice’s Front Runners Guide to Top Manufacturing Software, August 2020.

FrontRunners constitute the subjective opinions of individual end-user reviews, ratings, and data applied against a documented methodology; they neither represent the views of, nor constitute an endorsement by, Software Advice or its affiliates. See the full report here..

But, that’s just the beginning of a long journey, here are our 9 Insider Tips for Smooth Implementation of MRP Systems for Small Business:

1. Know Your Needs

Whether you’ve already chosen the software you want to go with or still browsing, it is vital to know your reasons.

Otherwise, you’re going to lose focus very quickly.

To stress this point – you need to know what your needs are and what the problems are you’re trying to solve.

If it’s a large-scale inventory you’re struggling with, then find out if the system can handle your number of products. If it's raw material inventory booking you need, then check if there’s support for that before you start implementing.

An awesome place to start if you’re unsure is to look at where you’re currently using the greatest number of spreadsheets. Those are the elements you must ensure the MRP of your choice will be able to take care of.

It’s the tediousness and inefficiency that you want to get rid of, so make it the focus when finding and implementing your chosen software.

2. Free Trial = Everything

You can read about all the millions of features that a software has to offer and still not know what it's like until you try it out yourself.

It’s so often the case that a business buys into a great sales pitch and then finds that the system is much more difficult to use than expected. Or it doesn’t even match their needs.

It can happen, for example, that an MRP software says that it tracks your stock so that you know when you are low on materials. However, it might not tell you that there is no visual cue for this, so you need to check the system manually every day to find out what you're missing.

This means your workload has not been reduced that much, and sadly you wouldn’t know until you had already bought in.

That’s why you should look for MRP that offers a free trial with demo data so that you can play around and start imagining your business down the line.

START A FREE 14 DAY TRIAL WITH KATANA MRP

3. Prime Your Data

One of the major speed bumps in MRP implementation is the lack of organized and accurate data.

Firstly, that means making sure that your inventory lines up with the reality of your stockroom. You can give your new system a head start by doing a thorough stock check at this time and updating your numbers.

Secondly, you need to get your spreadsheets in order in terms of materials and products. That means having your inventory matched with their SKUs, variants, costs, categories at the ready so that you can import your data as soon as needed.

Katana offers a data import template, which makes transferring your inventory from your spreadsheets effortless. Or, if you already have a Shopify store, then you can use the integration to bring your finished products over from there at the touch of a button.

PRO TIP: Learn everything you need to know about Shopify inventory management and take your e-commerce manufacturing business to the next level.

4. Do an Integrations Checklist

Most cloud manufacturing software works with other online applications to give you a broader set of options for areas like accounting and online sales.

That’s why you must consider the current and future integrations of the system you’re going for. Make sure that you can, for example, connect to QuickBooks for accounting and that you have a Shopify inventory integration available.

But even more importantly, you need to know how far the integrations go and what the limitations are.

Just because there is an integration in place doesn’t mean that you can do everything you imagined. There could be workarounds involved, and you want to know if they’re worth investing the time in.

5. Look for Expert Support

Every discipline has its guru, and MRP implementation is no different.

See if there is an implementation meeting offered by the company you’re signing up to. Having a guru by your side to set things up (even if virtually) can make a huge difference in the time you save working it all out yourself.

You also want to find out if there are demo videos available to give you an idea of how the whole system works.

Here’s a demo video from Katana Smart Manufacturing Software to give you an idea of what to be looking for in terms of expert support.

6. Separate Testing and MRP Implementation

You want to know how your new system works before you go all in, right?

That’s why it’s useful to start with a testing period where you can play around and iron out the details. You could start with one product to keep the process simple. Probably best to go with your key product if you have one, and that can serve as the centerpiece to work around.

After you’ve tested that, and the ironing has been done you can move on to implement your system to its full capacity. If you’ve already run your tests properly, then you shouldn’t be overwhelmed by any unexpected jabs.

But even then, you want to constantly be reviewing your processes to make sure that you’re getting the most out of it. Especially in the first couple of months.

7. Get Everyone in the Loop

It becomes a lot easier to make sure your MRP implementation goes to plan if you have your team to support you. Doing this alone just means you’re going to have to go back on yourself later down the line. Better to get it right on the first run, right?

MRP implementation can be a lengthy process. Depending on the complexity of your business, it could be a matter of weeks, but more realistically it’s a matter of months.

Still not bad considering ERPs take an average of 6-24 months to implement.

But that’s why everyone who’s going to be using it must be kept up to date with the potential changes and training required ahead of time. This is a significant incoming change and should be treated as such.

It’s going to make the transition a lot smoother if the team is less resistant and more receptive to the change.

Give regular updates as to what stage you’re at, but even more importantly, use the opportunity for feedback. Especially from those who will be using it most frequently - like the production planner.

Your team can give insight into the nuances and details you might miss.

Remember: Team effort required.

8. Be Prepared for Change

Your processes might have to be slightly adjusted when executing MRP software.

Each system works differently, so your workflow could be affected by features like reorder point and perpetual inventory.

Take this as a positive step and run with it. Otherwise, you’ll be fighting against the system you’re trying to implement.

That’s only going to slow things down.

It’s much better to understand the benefits and spread the love to your team.

PRO TIP: There should always be someone with executive decision-making power involved so that the MRP implementation can be as effortless as possible.

9. Set Aside Sufficient Time and Resources

Failing to plan is planning to fail. So, make sure you set the time aside to come up with a detailed plan and checklist of your MRP implementation process. It’ll be worth the effort.

The process of MRP implementation could be one of the biggest projects you embark on.

A common mistake is underestimating the amount of time and energy it takes to set up.

The implications are wide-spanning, and so there should be at least one person who is wholly responsible for the implementation.

That means taking the time to get things right, understanding the system, and swinging into action.

It can be a great idea to have an implementation plan written out, which you update every time you take the next step.

Here’s an example list of steps:

Analyze requirements;
Confirm that MRP has capacity for requirements;
Ready the test data;
Go into testing;
Ready the full data;
MRP implementation with full data;
Run integrations;
Make adjustments for optimization; and
Review progress and whether requirements reached.

6.Upgrade to the Ultimate MRP System.

So, that’s everything you need to know about the world of the MRP ERP system.

Using this guide, you should have a better understanding of if you should get set-up with ERP and MRP systems or if you should stick it out for the time being by manually tracking your business’s processes.

However, if you're thinking of adopting an MRP system or want one on your wish list for later, which is the best for your business?

TRY KATANA MRP FREE FOR 14 DAYS

ERP system for small business can set manufacturers back quite a bit because of how much they cost. That’s why small businesses are better off using MRP systems.

Katana MRP – Smart Manufacturing Software

Katana MRP is an all-in-one tool for SMB manufacturers, regardless of their industry, looking for:

Enhanced inventory and order management;
Access from anywhere with an internet connection;
Priority-based production planning;
Multichannel sales management;
Manufacturing floor level control; and
Product traceability.

This MRP system is designed with the modern manufacturer in mind, as it is capable of handling your regular B2B e-commerce platform orders, but also gives you the power to implement a d irect-to-consumer business model.

So, how exactly will Katana help you improve your production lines?

Inventory and Order Management

Katana supports all your different manufacturing processes, from how you manage your stock to if you use forward or backward scheduling for your production.

The automated inventory management feature can track and monitor all your different inventory types (including raw materials, work-in-progress inventory, and finished goods).

Integrations with your favorite e-commerce and accounting apps (like Shopify, WooCommerce, Xero, and QuickBooks.) allow you to create a smooth workflow and a centralized point to handle your sales and manufacturing orders.

Accessible on the Move

Katana is accessible from any location that has an internet connection, meaning if you or a manager have to step out of the office, you can still check-in and monitor the status of tasks (something that can’t be offered by localized ERP and MRP systems).

Trends and predictions indicate a shift in the manufacturing landscape, with many business’s ditching the traditional workshop set up and working from the comforts of their own home. An online MRP system like Katana supports you and your team for when someone needs to do remote work.

If you take commissions or use outsource manufacturing, providing partners or freelancers access with their own account allows you to have a clear channel of communication with not only employees but other individuals from anywhere around the world.

MRP/ERP systems automate your production planning.

Priority-Based Production Planning

No more sweating trying to design the perfect production plans. Katana automatically schedules your production based on which orders were created first. However, if you feel the need to rearrange your workflow, you can do so with Katana’s nifty drag-and-drop function.

Once you’ve defined your resource capacity with Katana, it will be capable of calculating how many resources you need and will consume for a project, along with giving you an estimated deadline for the project. All this information can be used to improve your rough-cut capacity planning.

Integrations with your e-commerce platforms will allow you to generate manufacturing orders from within Katana if you have no finished goods available. Katana will also take care of all the associated scheduling.

Manufacturing Floor-Level Control

Katana has the shop floor control app (SFC), which gives production planners and employees a clear channel of communication, so each can update the status of tasks, monitor the progress of operations, and easily assign tasks to available resources.

The SFC app gives you smooth shop floor planning by taking manufacturing orders from the main Katana dashboard and automatically breaking them down into tasks. The system then assigns them automatically to workers and resources – though managers can easily change the workflow if needed.

By improving your shop floor scheduling, you can improve your: production efficiency, enhance your capacity planning, set accurate due dates, prioritize production, and reduce production set-up time by having better planning functions with the SFC app.

Product Traceability

Katana offers users product traceability which allows manufacturers to add batch/lot numbers to items, track expiry states of products, and track the best before dates of products. Features such as this and food traceability are an essential or even a legal requirement in some industries.

This feature also comes with the tools to perform batch tracking, which gives manufacturers the capability of performing track and trace operations on defective or contaminated products. Ultimately, giving you the power to implement the smoothest product recall possible and track down batches.

If you’re already using software, such as QuickBooks Online for inventory management, Katana can integrate with your QB account, to bridge the feature gap when it comes to QuickBooks Online lot tracking.

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General FAQs

What are MRP and ERP systems?

MRP and ERP systems are software solutions that enable you to run your business in a smart and streamlined way. The major difference is that a Manufacturing Requirements Planning (MRP) system is focused around a business' manufacturing needs. When choosing the best MRP system for your business, you should consider a smart MRP that is fully integrated with your business' ecommerce and accounting.

Why is an MRP system important?

An MRP system ensures effective inventory management, production scheduling, and material purchasing. It will allow you to avoid stock-outs and maintain quality standards through traceability and full visibility into your manufacturing process.

What are the elements of an MRP?

MRP systems are centered around four main elements: production scheduling, production and material planning, production management, and supplier lead times. These elements ensure that you can effectively manage your raw materials and subassemblies inventories, ensure effective shop floor control, and streamline your inventory and sales orders.

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