During the implementation of MRP system what is the precaution you shall take to avoid materials overstocking at the warehouse & large number of PR's?

You need to be careful as you will not get MRP right straight away. The answer is simple.

1) Do not run MRP straight away

2) When you do, do it without auto replenishment switched on

3) Manually check the results until you are happy with them

4) Switch on auto replenishment

stock monitoring & stock audit

We do it manually in parallel till we assure we are satisfied with the results 

the precaution should be taken as follows:

1) check wheather the goods purchased is consumer durable or not, and the goods should move in regular basis.

2) keep a regular check on " Slow movement of goods"

3) Maintain " FIFO " Method (First in first out),

4) Segregate the product  to make things easier.

Follow some basic rules:

-Keep a tab on the DSOH (days stick on hand) for your inventory

-A regular check on the slow moving items

-Do your due diligence on product forecast keeping in mind the delivery time vs. the consumption

Also following FIFO rule would be good to ensure you do not land up with junk or expired stock

In any materials stocking system , you should monitor the Age wise analysis report and keep the minimum stock levels