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One of the most powerful features of the GP Manufacturing Suite, is MRP – Materials Requirements Planning. Paradoxically, it may also be one of the least understood functionalities in the GP world! While MRP can work wonders for a manufacturing organization in helping control inventory, there is a certain level of hesitation, in the user *and* the consulting community, about implementing MRP. Some of the hesitation may stem from the users’ experiences with MRP in a legacy ERP system, or sometimes it is simply due to a lack of understanding of the mechanics and the functioning of MRP. And then some folks might just feel intimidated by the plethora of new terminology that gets introduced in relation to MRP.

What is MRP?
Very simply put, MRP encompasses “a set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate requirements for materials.” (APICS definition of MRP) The primary objective of MRP is to balance out the supply and demand for purchased as well as manufactured items, in a “time phased” manner. It thus strives to ensure the supply (availability) of items (products), to the demand for those items (products), over a defined time span (‘horizon’). The outcome of a “well-oiled MRP machine” is a well-coordinated production and purchasing plan.

Very loosely put, MRP has at its core, the objective of ensuring the equality in the very simplistic equation Supply = Demand, for all inventoried products, across the entire planning time-span (horizon):

Demand for a product is derived from the sales orders placed by the customers and sales forecasts (independent demand, for finished products), as well as the manufacturing pick lists (dependent demand, for raw materials and components). It also includes the safety stock levels that must be maintained. Supply of a product includes purchasing and manufacturing receipts, and the inventory on hand. MRP tries to establish a balance in the Supply Demand equation. Where an imbalance exists (i.e. a shortage or an overage / excess) MRP will recommend a corrective action, based on the nature of the imbalance and the replenishment method of the part. For example, where the supply is less than demand (shortage), MRP will recommend a purchase order for buy parts, and a manufacturing order for make parts, to meet the shortage. It may also recommend moving-in an existing purchase order or a manufacturing order. Where supply is in excess of demand (overage), it would recommend the cancellation or moving-out of a purchase order or a manufacturing order as the case may be.

As mentioned above, there are three basic outputs of an MRP run: recommended purchase orders, recommended manufacturing orders, and warnings / notifications (called ‘exceptions’ in GP).

In recommending the corrective action thus identified, MRP will further reinforce this very simple and intuitive math with rules (‘order policies’) and quantity modifiers: minimums, maximums, and multiples, batch sizes. For example, a shortage of 527 units of a part may result in a recommended purchase order for 550 units, if the order multiple is set to 50 (let’s say that the vendor sells this part in multiples of 50 only).To make the planning sensitive to time, MRP will incorporate purchasing lead times as well as manufacturing lead times. Thus MRP can be modeled to perform a comprehensive math, based on real-life situational rules. This significantly adds to the power of MRP.

In spite of the power of MRP and its usefulness in the production and materials planning, apprehensions and misconceptions about MRP abound in the un-initiated user space. “Will MRP force me to create and schedule manufacturing orders according to its plan?” “Will it cause me to build up inventory based on unmet forecasts?” “The MRP recommendations do not make sense.” “MRP is not working right.” These are some of the commonly expressed / mis-conceptions. In fact, MRP is not the be-all and end-all of manufacturing. It is only a tool, which only makes recommendations, it does not perform any self-initiated actions. It is a deterministic mathematical model that is sensitive to the settings and data parameters. The age-old adage of “Garbage in Equals Garbage Out” holds especially true about MRP.

To remove the apprehensions and misconceptions, what is needed is a clear understanding of MRP, its objective, it’s functioning. A detailed knowledge of the data elements that MRP is dependent upon, and how they are treated, and where they are stored in the labyrinth of GP screens. This will enable the user to correctly interpret the results of MRP, take appropriate actions, and overall boost their confidence in MRP.

The “MRP Workshop”. Our approach to de-mystifying MRP involves conducting an “MRP Workshop.” This workshop is conducted either as part of a GP Manufacturing implementation, or as a stand-alone session. It thus addresses the needs of new users (new implementation) as well as GP users who may actually be using MRP, but who still need to get a sense of confidence in the MRP results (stand-alone session). The objective of the workshop is to gain such a deep understanding of MRP, that the workshop participants can predict the outcome of MRP. To facilitate this, we create a simple “control environment”. We go over the setup requirements, and the data that provides the inputs to MRP. We go over, for example, the impact of checking an in-obtrusive check-box, and how that would affect the MRP suggestions. We do various “what-if” scenarios. We make changes to the data, and based on the changes made, try to predict the quantitative output of MRP. If the MRP returns results are not in line with the expectation, we analyze and substantiate the results of MRP, and reconcile the prediction with the actual results. When the MRP results are exactly per expectation / prediction, we move on to the next scenario.

By the end of the workshop, the participants have a thorough understanding of MRP and its functioning. We have eliminated their apprehensions and misconceptions about MRP, strengthened their ability to predict MRP results and increased their confidence in the results. We have demystified MRP.

For a high level estimate of your investment in Microsoft Dynamics GP, please use our “FREE” Microsoft Dynamics GP Quick Quote Tool. It will give you a great starting point for assessing your potential investment in a project like this.

If you have additional questions or would like to learn more about our “MRP Workshop” or what Microsoft Dynamics GP can do for your organization, please contact us today to setup a “Free Discovery Call” at 636-237-2280 or email at .

By Ajit Tulpule & Michael Ramatowski at Turnkey Technologies, Inc. – Missouri Microsoft Gold Certified Dynamics GP and CRM Partner


“Mediocre men wait for opportunity to come to them.  Strong, able, alert men go after opportunity.” B.C. Forbes

Debates over online sales tax, and related statutory rules and rate changes have vaulted sales and use tax compliance to the top of every savvy businessperson’s 2013 action list. Understanding how to implement safeguards and systems, monitor widely varying statutory rules, and find efficient ways to collect and remit the right sales and use tax to the right jurisdiction at the right time, can flummox even the most compliance-minded businessperson.

The following five sales tax compliance tips identify steps your business can take to address 2013’s particular challenges. Developed by Avalara sales tax experts, these are a starting point, rather than an exhaustive strategy, for addressing sales and use tax compliance in 2013.

Tip #1 — Determine tax liability by analyzing changes to nexus rules

While most businesses have some concept of nexus—the connection between a business and a taxing jurisdiction requiring sales tax collection and remittance — many are unaware of dramatic changes to nexus laws happening now. There are numerous developments on the federal level, but this tip focuses on state level changes that are currently underway. These rule changes significantly impact out-of-state remote sellers (such as online retailers), but all businesses should watch nexus laws closely.

Tip #2 —Stop ignoring consumer use tax

Use tax is defined as a tax on the use of tangible personal property (TPP) not otherwise subject to sales tax. Generally speaking, a purchaser owes use tax on taxable items purchased on which they paid no sales tax or less tax than the applicable sales tax rate. Unlike sales tax, the remittance responsibility lies with the buyer (either a business or an individual). In some cases, the purchaser would be a business, such as a manufacturer or a distributor, buying goods outside the state or online, to use, or consume as TPP. Use tax must also be paid when a business withdraws goods from inventory for its own use, if sales tax was not paid on those items at the time of purchase. It is the responsibility of a business to self-assess when, and if, use tax is accrued and to pay the state and/or local tax authority on a tax return.

Tip #3 — Understand changing exemption certificate rules

Tracking and filing exemption certificates, the bugaboo of many a well-intentioned business owners, has just gotten more complicated. In 2013, several governors have already proposed plans that would change what their states exempt from sales tax.

Tip #4 —Know when, where, and how to remit sales and use tax returns

Even companies that work hard to accurately track and update changes in sales and use tax rules, boundaries, and rate changes often fail to remit their liability correctly. Knowing which form to use, where to file, and what to include in your returns, can be an onerous task.

Tip #5 —Get Help

Companies trying to accurately collect, file, and report sales and use taxes face an uphill battle in 2013.

Please join us on April 17th for a free educational webinar hosted by Avalara, on “Sales Tax Automation and How to Take the Lead in All 50 States”, including how to grow into new markets and stay compliant. This thought leadership webinar will be presented by industry leading experts from WithumSmith + Brown. They will share the critical steps to growth and what you need to know when looking to go forward with a new state.

I also invite you to download an upbeat and engaging new white paper, “25 Brilliant Ideas to Outsmart Your Competition with Microsoft Dynamics ERP”.  This report includes 25 examples from real companies – from non-profits to distributors and many in between.

For a high level estimate of your investment in Microsoft Dynamics GP 2013, please use our “FREE” Microsoft Dynamics GP Quick Quote Tool.  It will give you a great starting point for assessing your potential investment in a project like this.

If you have additional questions or would like to learn more about what Microsoft Dynamics GP 2013 can do for your organization, please contact us today to setup a “Free Discovery Call” at 636-237-2280 or email at .


By Michael Ramatowski, at Turnkey Technologies, Inc. – Missouri, Illinois, and Kentucky Microsoft Gold Certified Dynamics GP and CRM Partner