Boost eCommerce Sales with Manufacturing Resource Planning
Last update: 22 March 2024 at 01:26 pm
3.00/5Manufacturing resource planning (MRP II) is one way to achieve maximum sales and minimum costs in the manufacturing industry. It increases production efficiency by determining the resources needed to meet customers’ orders. And ensuring these resources are always available when needed.
This, in turn, ensures that there’s no overproduction or excess unprocessed inventory — both of which can increase your production costs.
For instance, filling your storage space with unused inventory ties up your capital. It also leads to other unnecessary costs, such as transporting the inventory from suppliers, lighting the storage space, and much more.
Manufacturing resource planning also increases sales by ensuring you have the resources to provide customers with the products they need when they need them.
You need accurate demand forecasting to achieve this level of efficiency in your manufacturing resource planning. And this is where integrating marketing automation in manufacturing resource planning comes in.
What is Manufacturing Resource Planning?
As you’re aware, multiple resources are needed in the manufacturing process, such as:
- Raw materials
- Equipment
- Software
- People
- Components from suppliers
Proper management of these resources is necessary to avoid wastage and under-usage. Efficient resource management is also necessary to avoid any disruption in the production cycle and ensure customers’ goods are ready on time.
This is what’s known as manufacturing resource planning or MRP II.
A manufacturing resource planning software ensures precise coordination of these resources.
By centralizing and processing information related to the manufacturing process, manufacturing resource planning software facilitates effective decision-making in matters like:
- Scheduling
- Inventory management
- Cost-control measures
- Design Engineering
Why is it known as an MRP II?
It’s because manufacturing resource planning is an advancement from material requirement planning (MRP I).
An MRP is a resource planning system that takes inventory of raw materials on hand, calculates what’s needed to manufacture a product, and schedules their purchase or production.
Based on sales forecasts, it relies heavily on only the necessary goods and their quantities. This helps enhance production schedules and purchasing plans
On the other hand, the more advanced MRP II system has all the capabilities of materials requirements planning. But it takes them further and integrates additional data from logistics, human resources, digital marketing, finance, and accounting systems.
An MRP II is a closed-loop system that ensures consistent harmony between resource availability and planned consumption.
Both MRP I and MRP II systems are key to enhancing the functionality of an enterprise resource planning (ERP) system.
An ERP helps you run the entire organization by managing and integrating essential parts, such as finance, procurement, human resources, supply chain, and manufacturing.
What Makes Up an Effective Manufacturing Resource Planning System
6 main components are at the core of an MRP system.
1. Master Production Schedule (MPS)
This is the overall plan (master plan) for producing your end goods.
It includes details, such as how much each product needs to be produced and within what time.
Here’s an example of a master production schedule created using Katana, a cloud-based manufacturing software.
Image via Katana
Master production scheduling is informed by:
- Customer orders
- Forecasted demand
- Inventory levels
- Lead times
- Current capacity constraints
2. Inventory Status File (ISF)
In the simplest terms, this is the real-time data depicting your inventory levels. It shows:
- The quantities of inventory in stock
- Where each of this inventory is stored
- Inventory on orders from suppliers
- Backorders from suppliers
Continuous monitoring of the inventory status file facilitates effective inventory planning. It ensures you have enough inventory to complete manufacturing processes and meet customer demand.
3. Bill of Materials (BOM)
This is a detailed breakdown of all the raw materials, parts and components, assemblies and sub-assemblies, and any other input required in the manufacturing of a product.
It also includes the quantities of each component.
4. Capacity Planning
Capacity planning involves analyzing the business’s maximum production rate against sales orders and forecasted demand.
The purpose of capacity planning is to undertake realistic production scheduling that doesn’t exceed the available capacity or breach any production process constraints.
5. Quality Assurance
Most MRP II systems include quality assurance. These are the processes that ensure the goods produced are of the expected quality levels, at all times.
This is important in manufacturing resource management in that there’ll be less wastage in the form of defective products and returns.
6. Shop Floor Control
These are tools that track and report the progress of work in relation to production orders and schedules.
It involves calculating the percentage of work completed for each order and also evaluating the current resource status, including labor and machine usage.
Shop floor control is an important aspect in an MRP II system because it supports resource planning and inventory valuations.
It also evaluates the risks and vulnerabilities in the shop floor environment and initiates measures which help keep these risks at an acceptable level.
Which Role Does Marketing Automation Play in Manufacturing Resource Planning (MRP II)
There are several ways integrating your MRP II with your marketing automation software can come in handy.
1. Understanding Customers’ Needs
Your marketing team interacts with your customers every day. They have a good grasp over what they want from their products. And any marketing expert will tell you that enhancing customer satisfaction is one of the trends in eCommerce that is here to stay.
You can create how to videos for your products and services to engage your customers and share them to social media platforms. It help you monetize the videos with your brand awareness boosting.
By integrating your manufacturing resource planning system with your marketing automation software, it becomes easier to gain visibility into marketing data and understand the features and standard of products the target market wants.
It prevents you from wasting resources on features and products that customers do not need.
2. Accurate Demand Forecasting
Marketing automation software makes use of predictive analytics based on historical data to identify upcoming and existing patterns and trends. This helps in making accurate projections of the demand for products.
So, by combining your MRP II system with marketing automation, you can avoid overproduction, which leads to waste. It also prevents underproduction that helps in avoiding lost leads for your business.
3. Better Order Fulfillment Management
Marketing automation streamlines workflow by creating a centralized database where you can monitor the sales pipeline.
As soon as the marketing team nurtures a lead into conversion, you can import sales into the MRP system. This makes it easier to manage order fulfillment.
In addition, data and analytics from marketing automation software can provide insights on the optimal order quantity and frequency of materials depending on the forecasted demand for products. This prevents frequent stockouts.
Why is Integrating Marketing Automation with Manufacturing Resource Planning Important for Higher Sales?
Let’s see how integrating manufacturing resource planning software with marketing automation software, especially when considering manufacturing e-commerce solutions, can boost your business’s revenue through increased sales.
In the evolving landscape of manufacturing, resource planning and efficiency are complemented by advanced technologies. Understanding the basics of robotics can significantly empower organizations to navigate through the complexities of automating processes and enhancing production capabilities. This foundational knowledge not only equips teams with strategic insights on integrating robotics into their operations but also aligns with achieving operational excellence and innovation.
1. Ensures On-Time Delivery of Services
Good delivery services, which means adhering to the promised delivery date, are as important as the quality of the goods you deliver.
It’s easy to take it lightly and assume that one late delivery to a customer will not impact your eCommerce sales. Or one lost customer due to late delivery will not have a significant impact on your revenue.
But here’s the thing — a negative review from an unsatisfied customer could affect your ability to attract new customers.
Online reviews and rating sites have made it easy for customers to share their experiences with businesses. They’re able to warn others of the kind of services to expect from a business.
Most consumers heed to these warnings and stay away from businesses with poor reviews and ratings.
A survey by ReviewTrackers proves this to be true. It shows that customers only trust brands with a 4-star rating and above.
Image via ReviewTrackers
And according to Statista, about 91% of online customers will read at least one customer review before making a purchase.
Image via Statista
It goes to show that you should always aim to keep your customers happy.
Besides, high customer satisfaction due to on-time delivery makes it easy to leverage effective marketing strategies like ambassador marketing, influencer marketing and social media marketing and many more.
Marketers create different types of visuals such as videos, GIFs, Images and shorts to upload them to YouTube, Instagram and other social media channels.
This involves turning loyal customers into influential advocates for your brand. But it’s hard to earn this loyalty if you keep frustrating your customers with late deliveries.
By integrating manufacturing resource planning with marketing automation, you can ensure you always have enough resources to fulfill all orders on time.
2. Streamlines Order Management
Integrating manufacturing resource planning with marketing automation drives an effective order management process. When you use the right set of ecommerce tools as listed out by Attrock in this post, you can drive customer satisfaction, leading to higher eCommerce sales.
By automating the order entry and fulfillment process, there’ll be fewer errors with customers’ orders.
Also, having a central source of data means your demand forecasting and manufacturing planning will be aligned.
You can identify problems early enough and make alterations and amendments before they wreak havoc in your order management and fulfillment process. This will create a more streamlined order management process, which speeds up the delivery times and keeps customers satisfied.
3. Prevents Stockout
It takes a lot of hard work from your marketing team to nurture relationships with leads at every stage of their journey until they’re ready to do business with you.
And the best part is that leads who get to the buying stage have the potential to turn into brand ambassadors for your business, leading to more sales.
But all this hard work and potential will go to waste if the customer gets an out-of-stock notification on your eCommerce site right when they’re primed to buy.
You end up losing lots of sales.
According to a survey carried out on Indian shoppers, stockouts cause 75% of consumers to buy from a different retailer (your rivals) and 5% will choose to forget about the product altogether.
Image via Statista
Even when a customer chooses to postpone the purchase, it leaves lots of room for them to change their mind.
All these consequences are unfavorable for your business.
That’s not all, stockouts can have more negative effects, such as:
- Poor customer experience. Customers always want to have the right product at the right time. Managing stockouts well can improve customer experience.
- Damage to your brand’s reputation.
- Increase in operational costs to meet market demand. This is because you’re likely to spend more when you buy raw materials on short notice.
Some of the major reasons behind stockouts are:
- Inaccurate inventory records
- Miscalculated demand forecasts
- Supplier delays
You can easily prevent all these problems by integrating manufacturing resource planning with marketing automation. It is a cheap
As mentioned earlier, marketing automation integrated with an MRP II software enables accurate demand forecasting.
It helps the production team plan for the machine units, labor, and other resources needed to meet this demand. And ensure these resources are available on time by providing suppliers with enough time to fulfill their orders. This prevents stockouts.
Takeaway
Manufacturing resource planning, done properly, can increase your eCommerce sales.
The trick is to integrate your MRP system with your marketing automation software.
It’ll lead to accurate demand forecasting and streamline your order management process. This, in turn, ensures that your customers get their orders on time, prevents stockouts, and ensures a great customer experience.
Go ahead and give it a try.
