inventory management

Why craft sellers need to use an MRP System

Materials Resource Planning (MRP) systems are an important part of growing your craft business - we show you how to assess if you need one.

There is a lot of discussion in the handmade crafting community about what systems sellers should use in their business. One system that has been gaining popularity lately is an MRP system. In this article, we will discuss the advantages of using an MRP system for handmade sellers and why you should consider implementing one in your business.

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What is an MRP System?

What is an MRP system, you ask? An MRP (Manufacturing Resource Planning) system is a software application that helps businesses plan and control their manufacturing process.

If you think that this sounds like something only large businesses can benefit from, you would be wrong: MRP systems are useful (and essential!) in any type of business where products are made from raw materials. And, as a handmade crafter, this definitely includes your business.

Advantages of MRP Systems

Save time

The first advantage of using an MRP system is that it can help you save time. If you are manually tracking your inventory, production schedule, and orders, you know how time-consuming and error-prone this can be.

As a handmade craft seller, you are constantly bombarded with requests from customers, looking up stock levels in your janky spreadsheet and printing out orders placed on your various sales channels. It can be hard to stay focused on one task when you have so many things vying for your attention.

However, research has shown that context switching (jumping from one task to another) is actually damaging to productivity. When you switch tasks, it takes time for your brain to adjust and get back into the flow of work. This can lead to errors, mistakes, and a loss of focus. It’s important to create systems and processes that allow you to dedicate specific time working on your production schedule - an MRP system can be a great way to consolidate these tasks into a central place and help you regain your focus and attention.

Save money with an MRP

Another advantage of using an MRP system is that it can help you save money. By automating your manufacturing process and keeping track of your inventory levels, you can avoid common scenarios such as these:

  • Ordering too much material inventory, which ties up your cash unnecessarily in inventory (rather than helping you grow your business)
  • Ordering not enough inventory, which creates delays in your production schedule (so your customers don’t receive your products by their due date). Goodbye Etsy Star Seller rating!
  • Increased costs by “panic buying” smaller amounts of material stock with express delivery costs: this is a sure fire way of increasing your COGS and decreasing your profit margins.
  • Unnecessary wastage due to losing track of materials, and materials that reach their expiry date before they are used.

Improve your communication

Another way that a Material Resource Planning (MRP) system can help is to improve communication and collaboration within your team.

By having all of your manufacturing data in one central location, including your Bill of Materials and SOP documents, everyone on your team can access these when necessary and make changes as needed.

This can help reduce errors and improve decision-making, and also allow you to scale your business to be more than just yourself wearing all of the hats.

Features of MRP systems

MRP systems work by tracking the amounts of materials and components you need to create each of your products, and by combining this with real-time data about your stock levels and production can help you better plan your materials ordering and production schedule.

Most MRP systems have a few key features in common. Typically, they include a database of information on all of the materials used by a company, as well as information on the finished products that the company produces.

There is also usually a way to combine your materials into a product, automatically decreasing your material stock and increasing your product stock levels.

These features are combined together to track your inventory levels in real time, and this production data can also be used to generate reports on production costs and material usage.

In addition, most MRP systems include a set of tools for planning production schedules and for tracking the progress of orders. These tools help to ensure that production runs smoothly and that finished products are delivered on time.

MRP systems for craft sellers

There are a number of different MRP systems available, and many of them are well suited for small craft maker businesses. One of the most popular choices is Craftybase, which an MRP system designed specifically for small businesses that produce their products in-house. They have built this product via the feedback of thousands of craft sellers, so definitely know the handmade production process.

Another popular option is Katana MRP, which is a little pricier than Craftybase and not optimized for small craft operations. It is also a great piece of software that helps small business owners to optimize their production schedules and reduce waste. Both of these systems offer a free trial period, so it’s worth taking a look at both to see which one will work best for your business.

Whichever system you choose, make sure that it’s designed to meet the specific needs of your business. With the right MRP system in place, you’ll be able to streamline your production process and keep your craft business running smoothly.

If you are a handmade seller, we hope this article has convinced you to consider implementing an MRP system in your handmade business.

Nicole Pascoe Nicole Pascoe - Profile

Written by Nicole Pascoe

Nicole is the co-founder of Craftybase, inventory and manufacturing software designed for small manufacturers. She has been working with, and writing articles for, small manufacturing businesses for the last 12 years. Her passion is to help makers to become more successful with their online endeavors by empowering them with the knowledge they need to take their business to the next level.