MRP stands for Material Requirement Planning. It helps factories calculate what material is required, how much is required and when it should be available for production.
MRP is important because production does not fail only due to machines or manpower. Many production plans fail because one small material, child part, bought-out item, packing material or consumable is missing.
The basic inputs of MRP
MRP needs three main inputs: demand, BOM and inventory. Demand tells what needs to be produced. BOM tells what materials are required for each finished product. Inventory tells what is already available. Based on these three, the system calculates shortage and purchase requirement.
Factory example
If one finished product requires 2 brackets, 4 screws and 1 label, then an order for 1,000 products requires 2,000 brackets, 4,000 screws and 1,000 labels. If stores already has 500 brackets and 2,500 screws, MRP should calculate only the balance requirement.
Why manual MRP fails
Manual MRP in Excel may work for a few products. But when there are hundreds of items, alternate suppliers, different lead times, minimum order quantities and changing production plans, manual calculation becomes risky. One missed item can stop the entire production line.
MRP and BOM accuracy
MRP is only as good as BOM accuracy. If BOM quantity is wrong, the purchase plan will be wrong. If units are not standardized, the calculation will be wrong. If scrap allowance or process loss is ignored, material shortage can still happen.
MRP and capacity planning
Material availability alone is not enough. A factory may have all material but still fail due to lack of machine capacity or manpower. That is why MRP should be connected with production planning and capacity planning.
How Factovare views MRP
Factovare treats material planning as part of connected factory planning. Material requirement should not be isolated from BOM, production demand, inventory, capacity and execution status. When these data points are connected, shortage risk becomes easier to identify.
Conclusion
MRP is not just a purchase calculation. It is a production protection system. Good MRP helps factories avoid shortages, reduce emergency purchases and improve planning reliability.