Introduction
Nestlé is a multinational food and beverage business based in Switzerland, operating in more than 188 nations and creating more than 2,000 brands globally. It uses Material Requirements Planning (MRP) systems to plan, schedule, and manage the acquisition of raw materials and production of finished goods as part of its intricate supply chain (Nestlé, n.d.).
Benefits of the Master Production Schedule for Nestlé
The Master Production Schedule is one of the central aspects of Nestlé’s MRP planning systems (MPS). The MPS is a thorough plan that details how many finished goods will be produced exactly throughout a specific time frame. It is based on anticipated demand and considers lead times, inventory levels, and manufacturing capacity (Turken et al., 2020). Through coordinating production between its factories and suppliers, Nestlé can ensure that sufficient finished items are available when customers need them. Nestlé can reduce stockouts and the danger of overproduction by using MPS to improve its inventory levels and production procedures.
The Use of The Bill of Materials at Nestlé
The Bill of Materials (BOM) is another crucial MRP planning system concept Nestlé uses. A hierarchical list of all the parts, supplies, and subassemblies required to make a final product is called a bill of materials (BOM). It details the quantities and prices of each item, enabling Nestlé to calculate the production cost as a whole precisely. Moreover, BOMs assist Nestlé in managing inventory levels and purchasing choices, ensuring that the proper number of raw materials and component availability coincide with the production schedules.
Comparison of MPS and BOM
In contrast to BOM, which focuses on the raw materials and components required to make the finished product, MPS concentrates on the finished product when comparing the two MRP planning system concepts Nestlé utilizes (Bueno et al., 2020). While BOM is a more in-depth planning tool that offers a full list of materials required for manufacturing, MPS is a long-term planning tool that assists Nestlé in preparing for demand, capacity, and inventory levels (Nestlé, n.d.). While BOM manages inventory levels and purchase choices for certain raw materials and components, MPS manages production schedules across many plants and suppliers.
Conclusion
In conclusion, Nestlé’s adoption of MRP planning system ideas like MPS and BOM has proven essential in streamlining its supply chain processes. Nestlé uses the MPS and BOM to manage inventory levels and purchasing decisions while planning for demand, capacity, and inventory levels. Although both ideas are essential to Nestlé’s operations, they have different goals and purposes for handling the company’s intricate supply chain.
References
Bueno, A., Godinho Filho, M., & Frank, A. G. (2020). Smart production planning and control in the Industry 4.0 context: A systematic literature review. Computers & Industrial Engineering, 149. Web.
Nestle. (n.d). About us. Web.
Turken, N., Cannataro, V., Geda, A., & Dixit, A. (2020). Nature inspired supply chain solutions: definitions, analogies, and future research directions. International Journal of Production Research, 58(15), 4689-4715. Web.