What Is Material Requirement Planning?

Material requirements planning (MRP) is a manufacture planning, preparation, and list control system used to manage industrial processes. Most MRP systems are software-based, but it is possible to behavior MRP by hand as well.

MRP works by calculating the materials and components needed to production a product, based on the master production schedule (MPS) and the bill of materials (BOM). The MPS is a plan for how many finished goods need to be produced and when. The BOM is a list of all the materials and components required to make each finished good.

MRP takes into account lead times for ordering and receiving materials, as well as current inventory levels, to determine when and how much to order. This helps to ensure that the right materials are available at the right time in the production process.

MRP can be used to:

Reduce inventory costs

Improve production efficiency

Increase customer satisfaction

Reduce stockouts

Improve product quality

MRP is a influential tool that can help manufacturers of all sizes to improve their operations.

Here is an example of how MRP works:

A manufacturer of bicycles wants to produce 100 bicycles per week. The BOM for a bicycle shows that the following materials and components are needed:

1 frame

2 wheels

2 tires

1 chain

1 seat

1 handlebars

The MPS shows that the manufacturer has 100 frames on hand and 50 wheels on hand. The lead time for ordering frames is 2 weeks and the lead time for ordering wheels is 1 week.

MRP will calculate the following:

The manufacturer needs to order 50 frames to meet the MPS for the next week.

The manufacturer needs to order 50 wheels to meet the MPS for the next week.

The manufacturer does not need to order any tires or chains for the next week because it has enough on hand.

The manufacturer does not need to order any seats or handlebars for the next week because it has enough on hand.

MRP will also generate a production schedule that shows when each frame and wheel needs to be assembled into a bicycle. This helps to ensure that the bicycles are completed on time and that there are no stockouts of finished goods.

MRP is a complex system, but it is a valuable tool for manufacturers who want to improve their operations and profitability.

What is the material requirement process?

Here is a more detailed overview of each step in the MRP process:

1. Identify requirements to meet demand.

The first step in the MRP procedure is to identify the requirements to meet demand. This is done by using the master production schedule (MPS). The MPS is a plan for how many finished goods need to be produced and when.

2. Check inventory and allocate resources.

Once the requirements have been identified, the next step is to check inventory and allocate resources. This involves checking the current inventory levels of all materials and components to see what is available and what needs to be ordered.

3. Schedule production.

Once the inventory has been checked and resources have been allocated, the next step is to schedule production. This involves creating a schedule for producing the finished goods, taking into account lead times and inventory levels.

4. Identify issues and make recommendations.

The final step in the MRP process is to review the MRP results and identify any potential problems, such as stockouts or late deliveries. Recommendations can then be made to resolve these problems.

The MRP process is a complex process, but it is a valuable tool for manufacturers who want to improve their operations and profitability.

Here is an example of how the MRP process can be used:

A manufacturer of widgets has an MPS that shows that it needs to produce 100 widgets next week. The BOM for a widget shows that the following materials and components are needed:

1 frame

2 wheels

1 chain

1 seat

1 handlebars

The manufacturer has the following inventory on hand:

50 frames

20 wheels

30 chains

40 seats

50 handlebars

The lead time for ordering frames is 2 weeks and the lead time for ordering wheels is 1 week.

The MRP process would calculate the following:

The manufacturer needs to order 50 frames to meet the MPS for the next week.

The manufacturer needs to order 80 wheels to meet the MPS for the next week.

The manufacturer does not need to order any chains, seats, or handlebars for the next week because it has enough on hand.

The MRP process would also generate a production schedule that shows when each frame and wheel needs to be assembled into a widget. This helps to ensure that the widgets are completed on time and that there are no stockouts of finished goods

The MRP process is a valuable tool for manufacturers of all sizes who want to improve their operations and profitability.