Material Requirements Planning (MRP)
Also: MRP, Materialbedarfsplanung, Material Requirement Planning, Bedarfsplanung MRP, MRP-Lauf, Materialplanung
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Material Requirements Planning (MRP) is a planning method that derives precise material requirements from primary demand and bills of materials, generating purchase proposals and production orders. It forms the core logic of material planning in ERP systems.
Key facts
- MRP derives material requirements from primary demand and bills of materials, generating purchase and production proposals.
- Planning quality depends directly on the currency and accuracy of master data, stock levels and bills of materials.
- Planning parameters such as lot size, replenishment lead time and safety stock must be configured individually for each item class.
- MRP plans material requirements but does not control operational warehouse or transport execution – that is the responsibility of WMS and TMS.
What is Material Requirements Planning?
Material Requirements Planning – or MRP for short – refers to a computer-aided method for demand calculation and procurement planning. The starting point is primary demand: that is, customer orders, planned orders or forecasts for finished products. Using bills of materials, the system derives the required components, semi-finished goods and raw materials from these quantities and dates – referred to as secondary demand. Existing stock levels and already open receipts such as purchase orders or production orders are offset against this. The result is a set of concrete demand shortfalls, for which the system generates purchase proposals or production orders.
How does MRP work in practice?
The MRP run processes all planning-relevant data in a defined sequence: first, gross requirements are determined for each item; then net requirements are calculated after deducting available stock and open receipts; and finally, procurement proposals with specific quantities and dates are generated. Planning parameters play a central role in this process:
- Lot-sizing procedures: These determine whether planning is carried out on an exact demand basis, in fixed lot sizes or according to minimum quantities.
- Replenishment lead time: This determines by when an order must be triggered at the latest so that the material is available on time.
- Safety stock: This buffers fluctuations in demand and delivery times.
- Planning horizon: This limits how far into the future the system generates proposals.
In modern ERP systems, MRP is often implemented as a daily or event-driven run. Some companies also use a multi-level variant – MRP II (Manufacturing Resource Planning) – which incorporates capacities in addition to materials. However, whether and to what extent capacity constraints are taken into account depends heavily on the respective system and its configuration.
What matters when selecting and setting up MRP?
The quality of MRP results stands or falls with the underlying data. Outdated or incorrect bills of materials, incomplete inventory postings and unrealistic replenishment lead times lead to incorrect planning proposals – and consequently to overstocking or stockouts. Before implementing or optimising an MRP system, you should therefore systematically review data quality in the item master and in the bills of materials.
Equally important is the selection of the right planning parameters for each item class. High-value A-items with predictable demand are planned differently from low-value C-parts or spare parts with sporadic consumption. A preliminary ABC analysis helps to differentiate parameter sets in a meaningful way. It should also be clarified how exceptions and bottlenecks are handled: not every planning proposal should be automatically released – planners need informative exception lists in order to intervene in a targeted manner.
Related terms
- ABC-Analyse
ABC analysis is a method for classifying items, vendors, or processes into three priority classes (A, B, C) based on their economic significance. It forms the basis for differentiated decision-making in warehousing, inventory management, and procurement.
- Absatzplanung
Sales planning refers to the systematic forecasting of future sales volumes for defined products, regions, or channels. It forms the foundation for all downstream planning processes in production, procurement, and logistics.
- Absatzprognose
The sales forecast estimates future demand for products or items over a defined period. It forms the basis for inventory, capacity, and procurement planning in logistics and purchasing.
- Artikelstammdaten
Item master data refers to the permanently valid base data of an item – such as dimensions, weight, packaging units, hazardous goods classification, and best-before date relevance. It forms the foundation for all logistical, procurement-related, and system-driven processes along the supply chain.
- Bedarfsermittlung
Requirements planning refers to the systematic process by which an organization's future material or goods requirements are determined in terms of quantity and timing. It forms the basis for inventory management, procurement, and warehouse planning.
- Bedarfsmenge
The demand quantity refers to the quantity of an item required at a specific point in time or within a planning period. It forms the basis for ordering decisions, inventory planning, and production planning.
- Bedarfsplanung
Demand planning refers to the systematic process by which a company determines what quantities of materials, goods, or resources are needed and when. It forms the foundation for inventory management, procurement, and warehouse planning.
- Beschaffungsplanung
Procurement planning refers to the process by which a company systematically determines which materials or goods need to be sourced, in what quantities, at what time, and from which suppliers.
- Bestandsführung
Inventory management refers to the system-supported administration and continuous updating of all warehouse and material stocks within a company. It forms the basis for planning, procurement and accounting – and ensures that the book inventory and physical inventory are in agreement at all times.
- Bestandsmanagement
Inventory management refers to the systematic planning, control, and monitoring of stock levels across the entire supply chain. The goal is to ensure delivery capability while keeping capital commitment and warehousing costs within economically viable limits.
- Disposition
Disposition refers to the operational planning and control of resources, quantities, and orders in logistics – for example in transport or materials disposition. It encompasses capacity assignment, scheduling, prioritization, and response to disruptions.
- Dispositionssoftware
Dispatching software is a software solution for the operational planning, control, and optimization of transports, routes, and resources in logistics. It helps dispatchers efficiently coordinate orders, capacities, and time windows.