Logistics concept
Material Requirements Planning (MRP)
Calculate which materials you need and when to make planned production possible.
Material Requirements Planning (MRP) calculates which parts and materials are needed to execute a production plan. The system uses the bill of materials to translate the demand for finished products into component parts. It then determines how much still needs to be ordered or produced and when it is needed.
An MRP calculation takes into account, among other things, available inventory, scheduled receipts, lead times, and lot-sizing rules. The output is only usable if these data and the master production schedule are sufficiently reliable. Furthermore, a material recommendation does not automatically mean that machine or personnel capacity is also available; capacity assessment remains a separate step.
Properly implemented MRP makes future shortages visible earlier and helps to better align purchasing and production. As a result, rush orders and unwanted inventory buildup can be reduced. Without accurate data, however, highly volatile recommendations will arise, forcing planners to constantly make manual adjustments.
What is Material Requirements Planning (MRP)?
MRP translates production requirements via bills of materials into time-phased purchasing and production recommendations.
When do you use it?
Combine production planning, available inventory, open receipts, and lead times to determine net requirements.
What are the benefits?
Earlier insight into material shortages and better alignment of orders and production.