Material requirements planning I

Material Requirements Planning (MRP 1) optimizes material acquisition, storage, and deployment in production. It tracks inventory, calculates purchase needs, and enhances scheduling via advanced software, improving efficiency and meeting customer demands.

What is material requirements planning?

MRP I 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 I" (or "MRP 1") to distinguish it from manufacturing resource planning (MRP 2). MRP II encompasses all the capabilities of MRP I and optimizes other assets needed in a manufacturing operation: personnel, production equipment, spare parts and more.

When performed via a software solution, previous material requirements planning has involved a significant amount of manual entry and communication. In today's digitalized environments, MRP I 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 help manufacturers meet demands with existing inventory or increase these resources prudently and with great efficiency. MRP I, when implemented through an effective advanced planning and scheduling 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.

Understand the benefits

Improved on-time delivery

Generate optimized production schedules and enable quick responses to changes in demand or capacity, ensuring timely fulfillment of customer orders.

Better productivity

Minimize downtime and streamline resource utilization, leading to more efficient manufacturing processes and higher output.

Full visibility and control

Integrate inventory data, production schedules, and resource allocation, allowing manufacturers to monitor operations in real-time and make informed decisions to optimize performance.

Leaner operations

Optimize inventory levels, reduce waste, and streamline production processes, resulting in increased efficiency and cost savings.

Faster response to change

Gain real-time visibility into production schedules, inventory levels, and demand fluctuations, allowing manufacturers to adapt quickly and efficiently to shifting market conditions or customer requirements.

Higher margins

Reduce inventory costs, and minimize lead times, thereby enhancing operational efficiency and allowing for more competitive pricing or increased profit margins on products.

MRP I software functionality

Advanced planning software performs material requirements planning functions through numerous features that help manufacturers oversee various aspects of production planning:

Bill of materials (BOM) level planning
By enabling an exploded view of the bill of materials, MRP software calculates the production plan for lower-level items. Proposed material purchase requirements can be exported to an enterprise resource planning (ERP) or other system for action.
Interactive schedule visualization - Once an initial master production schedule (MPS) has been created, advanced planning software can display data as stock profile graphs and capacity usage graphs. Clicking and dragging a point on a graph is sufficient to change the master production schedule.
Make-to-order planning - In a make-to-order environment, stock levels of finished and intermediate items will not be part of the key process parameters. An advanced scheduling and planning based MRP system enables a manufacturer to evaluate the effects of future demand changes on the manufacturing process. When a shift in demand occurs, whether in terms of quantity or delivery dates, the manufacturer can quickly assess if it is possible to meet the new requirements.
Make-to-stock planning - Advanced planning software can generate accurate and achievable master production schedules (MPS) considering rough cut capacity, pack forward figures, target days of stock cover, manufacturing preferences, minimum and maximum re-order quantities, re-order multiples, and product shelf life. Production capacity can be specified as a quantity, duration or weight. With an MRP calendar system, production capacity can be varied over time. The capacity available then limits the production volume created in each period.