Glossary · Supply chain & plants
Material requirements planning (MRP) meaning
MRP in production means material requirements planning: working out what materials to buy, how much and by when. See how an MRP run works with a simple example.
What is the full form of MRP in production?
In a factory, MRP means material requirements planning. It is not the same as the maximum retail price printed on packs in India, which is a selling-price label. Search results mix the two, so a planner asking about MRP is almost always asking about materials.
How does an MRP run work?
- Start from the plan. The master production schedule says how much of each finished product will be made in each period.
- Explode the BOM. Multiply planned output by the quantity of each material per unit from the bill of materials to get gross requirements.
- Net it. Subtract stock on hand and quantities already on order or in transit to get net requirements.
- Size the order. Round net requirements to the supplier's minimum, pack or truck size.
- Offset by lead time. Release each order early enough to arrive before it is needed.
Worked example: two levels of a bill of materials
Illustrative numbers only. A plant plans 2,000 cartons of biscuits for a run on the 20th of the month. Each carton holds 24 packs; each pack uses one printed wrapper.
| Item | Gross need | In stock and on order | Net need | Lead time |
|---|---|---|---|---|
| Cartons | 2,000 | 1,400 | 600 | 5 days |
| Wrappers | 48,000 | 30,000 | 18,000 | 12 days |
The cartons must be ordered by the 15th. The wrappers, with a longer print lead time, must be ordered by the 8th. A planner who only looked one week ahead would first see the wrapper shortage on the 13th, five days after the last safe order date, which is the gap MRP exists to close.
MRP vs MRP II vs ERP, and other confusions
- MRP vs MRP II. MRP plans materials. Manufacturing resource planning (MRP II) adds machine capacity, labour and finance to the same plan.
- MRP vs ERP. ERP is the wider business system; MRP is one planning function inside or alongside it.
- Infinite capacity. Classic MRP assumes the plant can make whatever the schedule says. If the plan is not capacity-checked first, the material plan is built on output that will never happen.
- Forgetting packaging. Plants plan the main ingredient carefully and run out of printed film or cartons, which often have the longest lead times.
Good production planning software runs the material step from the same plan instead of as a separate MRP run: in Autowhat's Production & Procurement, projected production becomes raw-material need net of stock and in-transit, packaging need comes from the packaging BOM, and the buy plan carries an order-by date based on real lead time. The raw material planning guide covers order-by dates in detail, and the order-by date calculator works one material through.
Related terms
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Where this shows up in our work. Production & Procurement: Forecasts, capacity plans and purchase orders from one digital twin of the plant. Book a 30-minute working session with an engineer.
Questions
What is the full form of MRP in production?
In production, MRP stands for material requirements planning: the method of working out which materials to buy or make, how much and by when, from the production plan and bill of materials.
What are the inputs to MRP?
MRP needs three inputs: the master production schedule, the bill of materials for each product, and inventory records covering stock on hand, open orders and lead times. Wrong data in any one gives a wrong buy list.
What is the difference between MRP and MRP II?
MRP plans materials only. MRP II, manufacturing resource planning, extends the same plan to machine capacity, labour and finance, so the plant checks it can actually make what the material plan assumes.