Business Operations Optimization: A Detailed Report on MRP and ERP

This report provides a comprehensive analysis of business operations optimization through the implementation of Material Requirements Planning (MRP) and Enterprise Resource Planning (ERP) systems. It highlights the operating characteristics aligned with MRP, emphasizing its effectiveness in economic ordering, purchasing planning, and production planning. The report further discusses how MRP enhances work scheduling and customer service. It delves into the benefits of implementing MRP in an organization, focusing on the advantages of ERP in managing business processes, improving speed and accuracy, and streamlining workflows. Additionally, it covers the functional areas of ERP, such as business data analysis and real-time data provision, concluding that ERP systems offer significant advantages for companies of all sizes by improving productivity, reducing costs, and enhancing communication.

Running head: OPTIMIZATION OF BUSINESS OPERATIONS 1
Optimization of business operations
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Executive Summary
Business optimization is a service that aims to open the business potentials by
focusing on the designs. It optimizes the digital-ready infrastructures. The optimization
explores the experiences with knowledge of the benefits and its costs. Business optimization
is a method used in businesses, improving their process reflecting the improvements on the
company's efficiency. Busies optimization improves communication, working efficiency the
effectiveness which improves the productivity in a firm. There are different areas that benefit
from MRP. Optimization improves the purchases, production planning, work scheduling, raw
materials, economic ordering and the production process.
Table of Contents
Introduction 4
Operating characteristics aligned with MR 4-5
Operating characteristics rendering MRP effective 5-6
Benefits of implementing MRP in an organization 6
Items linking with Enterprise Resource Planning 6-7
Functional areas of Enterprise Resource Planning 7-8
Conclusion ………………………………………………………………………... 8

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Introduction
Optimization in business is the process of evaluating the efficiency, productivity and
overall performance of a business. Process optimization includes minimizing the cost and
maximizing the efficiency. The process is adjusted optimizing specific parameters without
interfiling negatively with some constraint. In order to change the process, the company's
assets should be maximized. The change of the process is about a change of the systems, the
designs and the decisions. The goal of the optimization process is to maximize more than one
of the process specifications while keeping the rest contained in their checks (Olhager, 2013).
This paper provides recommendations on business optimization process.
Operating characteristics aligned with MRP.
Material requirements’ planning is a computer-based inventory system that is
intended to assist the production administrators. It helps in scheduling and placing of orders
of items of dependant demands. They are driven by outstanding orders that ensure there are
enough inventories of demand items for them to meet the requirement for production. MRP
help in the inventory levels to reduce the level of constituent parts and the raw materials
inventory (Navazo, Méndez, and Peiró, 2014). This way they are able to ensure that there are
low inventory levels so as to ensure there is minimum capital that is tied up in inventory
reducing the carrying cost.
MRP is effective in economic ordering. Lot sizes are revealed exposing the items and
the raw materials that should be purchased for each of the components. With the production
demand in the account, the transportation costs, the quantity price breaks and the carrying
cost are determined accurately.

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It is also effective in purchasing planning. The managers are able to access and tell
what inventories are needed to match the increased demand on the ready products. Increase in
inventory comes with the demand for warehousing requirements (Dolgui, Ammar, Hnaien,
and Louly, 2013). Such information on the inventory requirements guide the managers to
create and plan for future adjustments and expansion of the facilities.
MRP is effective for production planning. The availability of raw materials
determines the rate of production. The pace of the production of the finished good depends
mainly on the availability of raw materials. In a case of shortages, the MRP identify them
early enough. The production managers shift the production assets to manufacture the items
that materials are available.
Operating characteristics rendering MRP effective
In work scheduling, the MRP has a system that gives perfect knowledge of the
availability of the inventories for the production process. The work crews are scheduled
properly by the by the managers where they are set to meet their specified needs. The crews
can be divided and sent at different shifts in the production line (Meyr, Wagner and Rohde,
2015). The production is done properly dealing with the overstaffing in the line of
production.
The MRP systems support the customer service. The systems collect comprehensive
and accurate data on the customers' demands. The demands of the customers are more
accurate and these representatives of the customer service issue their customers with the
accurate delivery order dates.
Enterprise resource planning is software in the business management process that
helps to manage the business making the office functions to relate to the technology, the
services, and the human resource. All the companies have an aim to improve their business

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processing. ERP applies mostly to large companies. It would be challenging for small
companies. There are several benefits and advantages that companies enjoy using enterprise
resource planning.
Benefits of implementing MRP in an organization
The advantage of using the ERP is that they are designed according to the specific
needs of the different kinds of organizations. There are several ERP soft wares that are in
competition in the market currently. The ERP software is set to meet the needs of a
healthcare facility while there are others that are set to meet the specification of the retail
store.
A major benefit of using ERP software enables the manager to control businesses with one
system. The core business is put under one system that the information is simple to access
and manage. An example is the manufacture of the ERP systems. They consist of many
functional facilities (Choma, Quintale, AM Zaina, and Beraldo, 2015). Their facilities hold
information on finances the manufacturing process, quality and sales yet they are all placed
under one system. The information is integrated which is a future that enables them to
communicate with each other.
Items linking with Enterprise Resource Planning
ERP has the ability to keep up to date. This is an advantage to the company. This is
because technology has the tendency to advance quickly. It saves the company the cost of
updating the programs since the cost for programming piles up quickly. Most of the
companies do not have space for the old systems. That way they practically and financially
migrate from the old systems to the modern ones. The art technologies have trends and
patterns that allow companies to make better solutions (Duan, Faker, Fesak and Stuart, 2013).
They come up with more reliable decisions that are in a more competitive edge. They have to

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struggle with the developments and the advancement so that they can remain in the
competitive market. They are forced to reposition themselves for growth since the business
needs to be run in more modern systems.
The companies are able to streamline their processes. They take no chance in the
consideration of workflows and business process. Running the ERP system in a business they
are able to improve on their speed. Information is more accurate on the operations of the
business (Ladewi and Mulyani, 2015). The business is made more efficient which is the aim
for every business and every person. This also improves the morale of the employees. They
tend to become more productive when they are happy. The company’s labour costs are
reduced; the working speed is increased, the productivity increases reducing the time that was
spent in production, which is a success for the company.
Functional areas of Enterprise Resource Planning
Business data analysis is facilitated by the ERP. The ERP analyses the company's
data which is valuable to the company. Using ERP the peak seasons are recognized easily and
the low seasons are identified. It is easier to learn about sales. They transform the method
that is used in gathering and analysing the information helping in the recognition of accurate
insights into the entire data more quickly. ERP offers real-time data on business resources
and work progress (Aghajani, Samadi and Samadi, 2014). That ensures that the user is
updated with the latest information that is more accurate and relevant.
The companies have to invest heavily in technology so as to meet the high
expectations of the customers. The ERP software has a centralized communication tool that
covers the entire department (Sowan and Tahboub, 2015). This gives the global vie for the
communication of all the customers. The communication with the customers is effective such

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that in case the customer needs to review past communications and orders the customer's
transactions history and service history can easily be accessed.
Conclusion
ERP is a system that many advantages and has several benefits. It is most effective to
the large companies. It can be used by all kinds of companies and organizations due to its
original and beneficial feature (Huang, and Handfield, 2015). They help improve the
companies' productivity, reduce the cost of production. Help in monitoring the progress and
keeps all the information about the organization of the company up to date. There is good
communication that runs from the company to the consumers which are not only an
advantage to the users but also to the consumers.

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References
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