Material Requirements Planning (MRP) is a scientific technique for managing inventories, helping optimize manufacturing control by determining the quantity and timing of material requirements. It aims to reduce inventory and lead times while improving operational efficiency, but relies heavily on data integrity for accurate outputs. Issues such as incorrect data can lead to significant challenges in implementation and operation, particularly for manufacturers with complex product designs or multiple locations.

1. MATERIAL REQUIREMENTS
PLANNING
Dr B Merceline Anitha,
Assistant Professor,
Department of MBA,
Sri Ramakrishna College of Arts & Science,
Coimbatore.

2. • It is a scientific technique for ordering and
monitoring inventories.
• It is for determining the quantity and timing
for the demand
• It helps managers in achieving effective
manufacturing control.
American Production and Inventory Control
(APICS) – “ MRP constitutes a set of
techniques that use bill of material, Inventory
data, and the master production schedule to
calculate the requirements for materials”.

3. OBJECTIVES OF MRP
• Inventory Reduction
• Reduction in production and delivery lead
time
• Realistic Commitments
• Increased Efficiency
FUNCTION SERVED BY MRP
- Order planning and control
- Priority planning and control

4. PROCEDURAL STEPS IN MRP
• Determine the gross requirements of the
finished products.
• Determine the net requirements of finished
products
• Adjust requirements for scrap allowances
• Schedule planned orders
• Explode next level
• Aggregate requirements and determine order
• Write and place the planned order
• Maintain the schedule

5. MRP SYSTEM
MASTER
PRODUCTION
SCHEDULE
INVENTORY
STATUS FILE
MRP
PROCESSING
LOGIC
BILL OF
MATERIALS
ORDER RELEASE
REQUIREMENTS
ORDER
RESCHEDULING
PLANNED
ORDERS

6. FACTORS INFLUCING MRP
FACTORS INFLUCING
MRP
PRODUCTION
PLANS
MARKET
DEMAND
POLITICAL
SCENARIO
TRANSPORTATION
OF MATERIALS
CAPACITY OF THE
PLANT
NATURE OF THE
MARKET
ORGANISATIONAL
RESOURCES
RELIABLE
DELIVERY
SCHEDULE
RELIABILITY OF
RECORDS &
STOREKEEPING

7. BENEFITS OF MRP
• Reduction in work in progress
• Priority benefits
• Effective utilisation of capacity
• Other benefits includes:
- Improved customer service
- Reduction in lead time
- Reduction in past due orders
- Reduction in finished goods inventory
- Increased productivity
- Quicker response to changes in demand

8. Problems with MRP systems
• The major problem with MRP systems is the
integrity of the data.
• The output data will be incorrect if may error
arises in materials data, or the master
production schedule.
• Data integrity affects the mistakes in input
scrap reported, waste, damage, box count
errors, production errors, and system issues.
• MRP systems that the user specify the
duration time from the order to finished
product.

9. • MRP is not suitable if a manufacturer have
factories in different cities or even countries.
• It has to work properly, both before
implementing an MRP system and in the
future.
• It is difficult when customers ordered old and
new design of the products.
• MRP needs to track the calculations correctly
for both versions.

10. • List of all that goes into a final end product.
• It is a list of components that are required to
build a product.
• It is maintained on computers in different files.
• list of the raw materials, sub-assemblies, sub-
components, and the quantities of each
needed to manufacture an finished product.
• Master file is created.
• This file contains the data of all parts in terms
of the classification of the part.

11. BILLS OF MATERIALS (BOM)

12. • BOM is not simply a materials list but it
provides information to reconstruct the
manufacturing process.
• It gives the interface to order entry.
• Based on the business BOS have different types.
• In industries, the BOM is also known as the
formula, recipe, or ingredients list.
• list of the raw materials, sub-assemblies, sub-
components, and the quantities of each needed
to manufacture an finished product.
• In electronics, the BOM represents the printing
wiring board or printed circuit board.

13. TYPICAL ENBINEERING BILL OF MATERIALS
LEVEL MATERIAL ID QUANTITY DESCRIPTION MAKE / BUY
1 18464-23003 Parent Adapter Make
2 15476-62058 1 Control Unit Buy
2 16794-97900 1 Tester Buy
3 12054-75032 3 Screw Buy
2 17492-59305 1 Cover Make
3 23857-59805 4 Sharp module Buy
3 19830-34910 1 Machine
Screw
Buy

14. Product structure tree for product P1
P1
S1 S2
C1 C2 C3 C4