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How an MRP solution can help parts distributors

Grant Ludema
NetSuite blog
| 9/21/2023
How an MRP solution can help parts distributors

Parts distributors need an efficient equipment inventory system to predict, maintain, and schedule production and delivery more accurately. While many enterprise resource planning (ERP) solutions offer visibility into supply and demand so that businesses can make better decisions, some parts distributors still need more. With the addition of a material requirements planning (MRP) module, distributors can combine business data with inventory information to better address their equipment-specific needs.

MRP defined

MRP is a systematic way to plan for every part so that distributors can count on optimal inventory.

MRP modules can help maintain a strict production schedule. They work backward to determine which part is needed and what its destination should be. Then, the module establishes from where the part will ship and how much it will cost to acquire and transport. While MRP systems can stand alone, it’s tough to beat the automation and end-to-end visibility possible when they are integrated with an ERP solution.

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More accurate planning with an integrated MRP solution

Whether equipment parts distributors have an experienced planner familiar with ERP solutions or companies are still using many disparate systems, the right technology can improve operations significantly. NetSuite ERP includes advanced functionality for financing, customers, sales, and order management.

With an integrated MRP module, the NetSuite ERP solution can:

  • Estimate needed quantities and when they’ll be available
  • Minimize inventory levels to free up cash flow
  • Reduce customer lead times to improve satisfaction

Additionally, these specific operations can meet the needs of equipment parts distributors in ways that plug-and-play manual solutions cannot.

Immediate inventory updates with automation

Parts distributors must decide between having inventory on hand for a potential surge in demand and tying up cash flow for what-if scenarios. Parts sitting in a warehouse are not just money sitting on a shelf. They take up valuable space for something that might be in higher demand. But with an integrated MRP system, warehouse management and salespeople have access to the same system so that supply can be managed in a way that makes financial sense for the entire business.

Fulfillment updates based on real-time information

NetSuite ERP and MRP solutions provide visibility into the company’s supply chain once a complete equipment piece has been updated in the system. While the system can’t prevent delays, it can alert parts distributors to interruptions so that customers can be made aware of fulfillment issues and distributors can better plan lead times in the future.

Reducing bottlenecks by anticipating demand

Equipment parts distributors must have an understanding of available quantities when unplanned demand hits. ERP and MRP systems can access historical data on manufacturers’ typical production times and anticipated customer request times for certain parts. These systems have information on the usual flow of production and orders and can provide data on previous unplanned requests. Having visibility helps distributors make more informed predictions.

Think of an MRP system as a calculator that needs an occasional upgrade

Whether a business relies on freehand calculations or low-barrier-entry technology, accurate information is important. The same can be said for MRP systems. Outputs are only as good as their inputs. If a part has a typical lead time of two weeks but something happens that changes the lead time to four weeks, all the subsequent information is going to be incorrect. An MRP system can continue to automate accurate delivery or recall inventory as long as updates are added to the system as needed.

We can help you set up an NetSuite ERP solution specifically for wholesale distribution.

Crowe has already developed several solutions for the NetSuite platform to address the challenges and barriers to growth for our wholesale distributor clients. We can do it for you, too, in less time than you might expect.

NetSuite consulting services

NetSuite consulting services

Crowe solutions for NetSuite can help equipment parts distributors plan more effectively

At Crowe, we know that the needs of equipment parts distributors are unique, so we developed solutions like Crowe Parts Distribution Accelerator for NetSuite specifically for you. We also understand that teams need the occasional upgrade (like an MRP system) to keep up with evolving business needs.

We offer ongoing training on MRP systems to check that your teams are inputting information correctly, and we can assist with new supplier or client onboarding.

Are you interested in connecting with a Crowe consultant to learn more about MRP solutions, NetSuite ERP, or Crowe Parts Distribution Accelerator? We can help.

Contact us

Grant Ludema
Grant Ludema
Consulting
+1 312 899 1510
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