Material requirements planning (MRP 1) is a strategy by which a manufacturer optimizes the acquisition, storage and deployment of materials needed in its production runs. MRP 1 keeps track of a manufacturer’s inventory of incoming raw materials and supplied components. The MRP system uses this information along with production orders and bills of materials (BOMs) to calculate the quantity and timing of purchases of additional incoming goods. Material requirements planning is abbreviated “MRP 1” (or “MRP I”) to distinguish it from manufacturing resource planning (MRP 2). MRP 2 encompasses all the capabilities of MRP 1 and also optimizes other assets needed in a manufacturing operation: personnel, production equipment, spare parts and more.
When performed via a software solution, material requirements planning in the past has involved a significant amount of manual entry and communication. In today’s digitalized environments, MRP 1 software is supported by advanced planning and scheduling (APS) solutions, which utilize advanced algorithms to balance demand and capacity.
As product portfolios diversify under stringent customer delivery requirements, APS-enabled material requirements planning may be used to help manufacturers meet demands with existing inventory or increase these resources prudently and with great efficiency. MRP 1, when it is implemented through an effective APS solution, helps manufacturers meet global customer requirements such as lead time reduction, improved resource utilization, and accurate prediction of resource requirements. With APS-enabled MRP systems, manufacturers can compare different scheduling scenarios, improve productivity, and track and control inventory.
Advanced planning software performs material requirements planning functions through numerous features that help manufacturers oversee various aspects of production planning:
APS-enabled MRP planning generates achievable and optimized production schedules, helps manufacturers respond quickly and intelligently to unanticipated changes, and satisfies customer demands with minimized lead times.