Material Requirements Planning (MRP) is a system designed to plan manufacturing production by calculating the materials and components needed to manufacture a product. MRP is a software-based integrated inventory and supply management system designed for businesses. It is a planning process based on the availability and flow of all materials involved in the entire manufacturing process. MRP is widely used by manufacturers and has been one of the key enablers in the growth and wide availability of affordable consumer goods.
The goal of MRP is to ensure that materials and components are available when they are needed, inventory levels are optimized, manufacturing efficiency is improved, and customer satisfaction increases. MRP systems allow businesses to efficiently manage inventory, schedule production, and deliver the right product on time and at optimal cost. MRP is typically used by smaller manufacturers with fewer products and a relatively simple production process.
The three primary steps of MRP include taking inventory of the materials and components needed to manufacture a product, calculating the number of items needed by the dates specified in the master production schedule, and generating purchase and manufacturing orders to meet production plans and customer demand. The three basic inputs of an MRP system include the Master Production Schedule (MPS), Inventory Status File (ISF), and Bill of Materials (BOM) .
MRP is the central production software that manufacturing companies use to manage, optimize, schedule, and automate large parts of the manufacturing process. This software integrates key aspects of manufacturing into a single productivity suite, including production, inventory management, order management, procurement planning, production scheduling, and many other functions. Digitized MRP systems allow for a production manager to assign quotas, update records, and analyze individual production levels within just a couple of clicks.
