Material Requirements Planning (MRP) is the process of ensuring that the right materials are available in the right quantities at the right time to support production.
Its purpose is simple: prevent production delays caused by material shortages while avoiding unnecessary inventory.
An MRP calculates future material requirements based on your production plan and continuously projects how inventory will change over time.
What Information Does an MRP Use?
An MRP combines several sources of information to determine future material requirements.
These typically include:
- Current inventory
- Bills of Materials (BOMs)
- Production Orders
- Customer demand
- Planned purchases
Whenever one of these changes, the MRP recalculates future inventory and identifies whether additional materials will be required.
What Does an MRP Answer?
A good MRP helps production managers answer questions such as:
- Do I have enough materials to fulfill future customer orders?
- Which materials will become unavailable?
- What should I buy?
- How much should I buy?
- When should I buy it?
- Which products should I manufacture, and when?
Instead of manually reviewing spreadsheets, the MRP performs these calculations automatically.
Why Not Use Spreadsheets?
Many small manufacturers use spreadsheets as their MRP.
While spreadsheets are excellent planning tools, they were never designed to continuously calculate material requirements as production changes.
As inventory moves, customer orders increase, and production schedules evolve, spreadsheet-based planning becomes increasingly difficult to maintain.
Manual calculations consume valuable time and make it easier for material shortages to go unnoticed.
Material Requirements Planning Is Different from Demand Planning
An MRP is not responsible for forecasting market demand or creating a long-term production strategy.
Demand Planning, Supply Planning, and the Master Production Schedule (MPS) define what the business intends to produce.
The MRP determines which materials are required to execute that plan successfully.
Many manufacturers continue using spreadsheets for strategic planning while replacing only the spreadsheets used as their MRP.
How ProdCalc Helps
ProdCalc is an AI-powered MRP built for small manufacturers.
It projects future inventory, identifies material shortages, and helps production managers understand what materials will be required before production is affected.
Instead of maintaining complex spreadsheets, simply tell the AI what you need.
For example:
- Create a raw material called Steel Plate.
- Create a Bill of Materials for a Wooden Stool.
- Create a production order for 100 units.
- Show future material shortages.
- Show what I need to buy next.
ProdCalc performs the material planning while you focus on running production.
Replace spreadsheets as your MRP.