Master requirement planning

Master Requirement Planning (MRP) is a computer-based inventory management system that helps companies to manage their inventory levels, production schedules, and purchase orders. It is a critical part of the production planning process that ensures the right amount of materials is available at the right time to meet production requirements.

MRP works by calculating the material requirements needed to produce a specific quantity of finished products. It considers the demand forecast, the inventory levels, and the lead time for materials delivery. MRP generates a detailed production plan that includes a bill of materials (BOM), which lists all the components needed for each finished product.

The MRP system uses the BOM to determine the materials requirements for each production run. It then compares the requirements to the inventory levels to determine what needs to be ordered and when. MRP generates purchase orders for materials that need to be ordered and schedules production to start once the materials are received.

MRP helps companies to manage their inventory levels by minimizing the amount of inventory they need to hold. It ensures that materials are ordered just in time to meet production requirements, reducing the risk of overstocking or stockouts. MRP also helps to optimize the use of resources, such as labor and equipment, by scheduling production in a way that minimizes downtime and maximizes efficiency.

Effective MRP implementation can lead to improved customer satisfaction, increased efficiency, and reduced costs. It provides a basis for monitoring and controlling the production process, allowing the company to quickly respond to changes in demand or supply.