Material Requirements Planning

Material Requirements Planning (MRP) is a production planning and inventory control system. It answers three questions: what is needed, how much is needed, and when is it needed. The system uses specific data inputs to determine material requirements. These inputs are the Master Production Schedule (MPS), the Bill of Materials (BOM), and inventory records.

The MRP process starts with the MPS, which details the quantity of each finished product to be produced in a specific timeframe. The system then uses the BOM to break down each finished product into its required raw materials and subassemblies. Finally, it checks current inventory records to see what materials are already on hand. The output is a schedule of purchase orders for raw materials and work orders for internal subassemblies.

On the shop floor, MRP helps prevent material shortages that can stop production lines. It also minimizes inventory holding costs by ensuring materials arrive just in time for manufacturing. This avoids tying up capital in excess raw materials stored in a warehouse. Accurate data is critical for an effective MRP system. Inaccurate BOMs or inventory counts will lead to ordering the wrong parts or incorrect quantities.

Manufacturers typically implement MRP using software, which is often a module within a larger Enterprise Resource Planning (ERP) system. The software automates the complex calculations required to coordinate purchasing and production. Regular data audits and cycle counts are necessary to maintain the data integrity the system depends on.