Materials Requirement Planning - Essay Example

One of these long term benefits of materials requirements planning is the fact that the software involved in materials requirement planning shall serve as a facilitator for the company to even benefit more from commonality because at every point in time, inventory organization is going to be undertaken by the software to ensure that the right allocation of materials and products are in place for production to begin. The system of having to undertake product and material inventory manually and mechanically would therefore be taken care of.

Role of commonality and how it benefits the company Going through the models of commonality available to Schwinn Bicycle Company, there are two major roles that the system can be said to be playing for the company. The first has to do with the benefit of overcoming market pressure and the second has to do with assurance of cost reduction for manufacturers. On the benefit of overcoming market pressure, it can be seen that the major idea behind commonality is the ability to interchange components and parts of the bicycles produced with others (The Guardian, 2012).

What this means to rate of production is that at any point in time, manufacturers are not obliged to look for the exact component or part that would fit into a specific area of the bicycle in the line of production. Subsequently, the time that spent on searching for parts is incorporated into the actual production time. In a typical example, the search for replacements for steel as against aluminum and aluminum as against titanium can easily be taken care of through the functioning of commonality.

Ideally therefore, manufacturers are afforded the luxury of dealing with materials as and when they are available to fit into another component and not necessarily complete a search for a new component. What is more, the company is able to cut down on cost significantly especially when it comes to the cost of labor. Indeed, commonality ensures cost benefit production in several ways (Gardener, 2001). In the case of Schwinn Bicycle Company, the company can have the luxury of depending on only a few laborers to get most parts of their production executed because the principle of commonality permits that one employee may play several roles on the production line especially when the use of common materials that can fit into other components are involved (Gardener, 2001).

For example within the company’s set up, it would not have to have an aluminum expert as well as a steel expert for the production of crown race. This is because the very laborer who works with aluminum could be trained to work with steel and so the cost of employing two workers becomes saved for the company. Still on cost benefit, it can be said that anytime demand meets supply or even exceeds it because market pressure is beaten by means of commonality, productivity goes high and this results in market revenue.

The company therefore has the benefit of completing several units of bicycles within shorter time frames, sales of which translate into increase in revenue for the company. How materials requirement planning (MRP) is useful to Schwinn One major criticism that has often come up against companies in the line of commonality is their refusal to adhere to the basic principles of materials require