Justifying The Cost Of MRP

Ensure you take these steps to assessing the costs and potential results before trying to justify the cost of MRP to your team.

October 2, 2018

If you are the owner of a manufacturing business then you may have just come to the conclusion that you need MRP software. It can help spur growth and profitability in your company.

You probably already know a lot of the benefits of MRP and what it involves yourself. Now you will now be faced with the task of explaining how a new system would perform. You need to justify the cost of MRP for your enterprise to fellow directors, board members and senior staff in order to start a project.

If you don’t have an expert on MRP already within your business, then you will find it hard to champion the project alone. In this case you can take these steps to assessing the costs and potential results before trying to justify the cost of MRP yourself.

First, Touch Base With Your Own Team About The Cost Of MRP

When trying to assess the cost of MRP within your own organisation, then a good place to start is with your own team. Speak to those who’ve been involved with MRP before to gain insight.

If none of your staff have inside knowledge then give us a call. We’ll be happy to provide more free advice about MRP. We can even put together pricing and a free demo so any naysayers will be able to see how much the cost of MRP will be and what you will get for your money.

Assess Your Needs As A Business & Go From There

Always remember than the purpose of implementing a new MRP solution is to make business processes faster and more efficient. This saves both time and money.

In order to do this effectively, you need to research where the problems lie in your current system. Record any issues and then feedback to your team about how MRP would help.

MRP could save you hours of labour on a job, reduce headcount and speed up a process. You will be able to plot how much money this would save over time versus the initial cost of MRP to be installed. Your team will be surprised by the result!

Get Accurate Figures

A stumbling block when trying to justify the cost of MRP is obtaining accurate pricing and plotting projections that are realistic. You will have to remember to plot the costs of everything involved in implementing new MRP software, before you draw any comparisons to the effect it will have in improving bottom line profits.

Things to consider when researching the cost of ERP prior to comparison:

  • The cost of expanding or building a new system from scratch – you can discuss this with us
  • Will training be required and for how many users?
  • How much will it cost to maintain and support the system – for Statii this costs very little as we can provide maintenance and support for you

Then put together a list of all the things you will be saving money on:

  • Reduced labour costs and overheads
  • Quicker turnaround on jobs so more productive and competitive on lead times than other businesses – more competition = more orders
  • Softer benefits have a value, improving customer satisfaction for more repeat orders, better decision making and more open and honest communication between your team.

Remember – One Size Doesn’t Fit All

When you’re trying to justify the cost of MRP remember that every method of justification works. Approaching the subject needs careful consideration and plenty of research and planning before leaping into a discussion with your colleagues.

With MRP being so heavily customised to meet your needs there isn’t a “out of the box” solution that will be 100% perfect for any business. Our custom MRP solutions are built to your needs. Manufacturing culture and the budgets within each SME can vary, and so you need the advice and knowledge of experts before you can truly get to grips with a potential system and try to justify the cost of MRP to your team.

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