Capacity Requirements Planning (CRP) SystemsCRP is just what your business need to provide them with the best EPR system. Capacity Requirements Planning (CRP) systems are part of the larger ERP and MRP systems sweeping businesses all over the world. The ERP systems allow companies to streamline their business processes by using one computer program and database for all of the companies information needs. MRP systems provide the same service except they work to streamline all of the aspects of manufacturing a product. The CRP system helps businesses plan for future needs by helping them determine how large their future inventory will need to be in order to meet the demand for the product in question. Companies that use a CRP system are able to know exactly how much storage space they will need to accommodate their stock for the future. This helps managers plan for all eventualities in scheduling and to avoid problems. The main components of a good CRP system is establishing, measuring, and adjusting production to meet the labor and machine resources that an organization currently has in order to meet supply and demand. CRP processes are traditionally input and calculated through the Order Entry module of an MRP system. Capacity for the business is then determined on the following formula by the CRP system: ‘the number of machines or employees’ x ‘number of shifts needed’ x ‘utilization of the material needed to make the products’ x ‘how long it takes to make one item’. In other words, CRP systems help companies determine how much work can be done in a given period of time with given or predicted resources. When a company foregoes the use of a CRP system they may find their production line to be less efficient resulting in under utilized resources or unfulfilled orders. CRP systems are designed to minimizes the effects of this inefficiency and help businesses adjust to the constantly changing needs of the organization. By being able to better control employees, shifts, materials, and the size of the production facility itself, companies can be prepared for the changes in the market and are able to make smooth transitions when needed. CRP systems come in three different types of classes. Lead strategy is the addition of facility capacity to meet a change in demand. It is very aggressive, it attempts to lure the customers from your competitors and you could be left with excess inventory if not done properly. Lag strategy is where a company adds to its facility capacity after its already running at 100% or overdue thanks to demand. While this strategy is conservative and reduces excess inventory, it can cause customers to go elsewhere while they wait for more of your product. Finally, match strategy is the addition of facility capacity in small amounts to respond to demand changes all most immediately. This is the middle ground strategy. A thorough evaluation of your company’s production and goals are vital to assessing the best CRP strategy to implement with your ERP system.
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