The main setback related to the use of MRP programs

rewrite this fully Cost The main setback related to the use of MRP programs is that it requires high initial capital investment. Business organizations are forced to pay initial operation cost that is directly linked with the installation of the new hardware components such as web servers, database server, wiring systems and software which constitutes the main requirements of any MRP system.

This compounded by the fact that there are some more operational elements such as employee wages, training costs and system maintenance costs which cause additional expenses. Lastly, the organizations have to come across some unexpected and unforeseen expenses at the design, installation and implementation phases of the MRP program which includes the costs related to application development, consultation from external sources, training of labor, system changes and modifications and testing. Ambiguity with MRP packages Nowadays, numerous MRP applications are easily available in the automated production market with next to excellent features and high performance capabilities.

However, several organizations suffer upon acquisition of MRP systems since these systems typically do not merge and are not compatible with the organizations existing infrastructure and present organizational policies. Though various vendors offer customization facilities based on the customer’s needs it directly falls to the additional costs factors incurred by the organization as mentioned in the previous paragraph.

It is thus paramount that organizations must conduct a proper investigation and analysis about the MRP packages and research the core functionality of the system before making a decision to purchase and implement the software. Otherwise these organizations suffer since the system may not be appropriate and compatible with their businesses.

However nowadays, organizations have a big advantage of outsourcing expert solutions for their IT development which may lead to some failures due to the weak interpretation of business strategies or functions caused by weak coordination of internal and external experts. In case of this instance, MRP software program may experience delays in implementation progress as more bugs and faults are solved during the project as noted by Wootinun Sung-Ong (December 2002)

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