what is mrp

Material Requirements Planning (MRP) is a production planning, scheduling, and inventory control system used to manage manufacturing processes. It is a system for calculating the materials and components needed to manufacture a product. MRP helps organizations to maintain low inventory levels and is used to plan manufacturing, purchasing, and delivering activities. The basic functions of an MRP system include inventory control, bill of material processing, and elementary scheduling. MRP can be applied both to items that are purchased from outside suppliers and to sub-assemblies produced internally. MRP is a tool to deal with the problem of customers wanting products to be available in a shorter time than it takes to make them. MRP provides answers for several questions, such as what items are required, how many are required, and when they are required. MRP is done primarily through specialized software and helps ensure that the right inventory is available for the production process exactly when it is needed and at the lowest possible cost. MRP improves the efficiency, flexibility, and profitability of manufacturing operations, making factory workers more productive, improving product quality, and minimizing material and labor costs. MRP is widely used by manufacturers and has undeniably been one of the key enablers in the growth and wide availability of affordable consumer goods, raising the standard of living in most countries.