1a Describe the relevant processes for managing workflow and so using an example of a transformation system. Diagrams should be included
1b Explain what is meant by Resource Requirement Planning and why it is necessary. Discuss the importance of an effective RRP system within the context of the system described in answer 1a. Particular reference should be made Nigel Slack
The proper material requirement planning setup helps companies to achieve three main goals. First, it helps manufacturers to plan and schedule their production operations in such a way that it will not require any excessive inventory. Why is this such an important factor?
Main reason is capital preservation and an effective use of working capital. Having less excessive inventory on hand means that companies do not tie up their valuable cash in inventory. They can remain liquid and use the funds on other needs, like expanding their operations, investing in new production lines or organizing additional marketing campaigns. Also by not allocating warehouse space to excessive inventory, businesses can save on rental costs or use the space for a better purpose.
When done correctly, material requirements planning helps to ensure that there is enough component available for production. It also helps to determine how much finished goods and by what date will be available for shipping to the customer. In material management everything is interconnected, the amount of finished goods planned for shipping depend heavily on the amount of material being purchased for the future product batch.