Material Requirements Planning
Material Requirements Planning (MRP) is a key manufacturing planning process that uses a site’s master schedule and all other sources of demand and supply to:
• Calculate gross item requirements and projected on-hand inventory
• Schedule and plan orders
• Produce action messages
This chapter explains how to use the system to create and maintain a material requirements plan.
Introduction to MRPGives specific details about aspects of MRP, including MRP and sites, and sources of demand and supply.
Setting Up MRPLists and describes steps to set up MRP, including prerequisites, MRP Control (23.24), Item Planning Data, inventory status codes, and product structures and formulas.
Executing MRPOutlines and describes how MRP functions and how to execute it with details on MRP processing, MRP scheduling, MRP pegged requirements, and MRP planning modes.
Reviewing MRP OutputLists and describes the two main outputs of MRP: action messages and planned orders.
Approving Planned OrdersDescribes how to approve planned purchase, work, and line orders.
Introduction to MRP
Material requirements planning (MRP) balances supply and demand for purchased and manufactured items. Given a set of demands or requirements, MRP automatically calculates a time-phased schedule of planned supply orders or replenishments to satisfy those demands.
MRP looks at demand for finished items and uses product structure information to calculate demand for component items. For each item, MRP looks at the ordering information, the amount currently on hand, and lead times, and generates planned orders suggesting how many of that item to buy or make and when to do so.
MRP and Sites
MRP’s planning activity is performed by site. Each site’s material plan is completely independent from inventory, demand, and supply at other sites. You can run MRP for several sites in succession, but it does not plan for these sites as a group.
For organizations with multiple sites, MRP can be used in conjunction with distribution requirements planning (DRP), which balances supply and demand among sites.
See User Guide: Supply Chain Management.
Sources of Demand and Supply
MRP uses the master production schedule (MPS) to calculate dependent component demand. Dependent demand is directly derived from the demand for other items, and includes demand for components items, raw materials, and subassemblies.
Independent demand is demand that cannot be calculated or derived from demand for other products. It is represented through forecasts and sales orders, and includes demand for end products and replacement items. Independent demand generally passes to MRP through the master production schedule.
Sources of Demand
MRP considers the following as sources of demand:
• Forecasts
• Sales orders
• Customer scheduled orders from a required ship schedule
• Intersite orders, generated by DRP
• Component requirements from manufacturing
• Production forecasts
• Safety stock requirements
MRP does not consider unconfirmed sales orders or component requirements from batch firm-planned orders as sources of demand.
Sources of Supply
MRP considers the following as sources of supply:
• Nettable quantity on hand (QOH)
• Purchase orders
• Intersite requests, generated by DRP
• Manufacturing orders (work orders and repetitive schedules)
• System-generated work orders resulting from flow scheduled orders
• Quality orders
• Supplier scheduled orders
MRP does not consider blanket purchase orders or non-nettable inventory as sources of supply.