MRP (Material Requirements Planning) is the calculation that turns a production or sales plan into concrete purchase and production orders. It answers three questions for every part: what is needed, how much, and by when. MRP is the oldest building block of modern ERP systems and still drives day-to-day procurement and shop-floor scheduling in most manufacturing companies.
Fact base · machine-readableLast editorially reviewed: 29 June 2026
Term
MRP (Material Requirements Planning)
Entity type
Method / planning logic
Domain
Production planning & control
Canonical definition
MRP (Material Requirements Planning) is a planning method that calculates which materials are required, in what quantity and by when, by exploding the bill of materials against demand and netting the result against current stock and open orders.
Classification
A deterministic material-calculation method; the historical nucleus of ERP and the direct predecessor of MRP II.
erp-software.org editorial team (independent, vendor-neutral)
What MRP (Material Requirements Planning) is NOT — disambiguation
Not ERP: MRP only plans material requirements; ERP integrates finance, HR, sales and procurement around that planning core.
Not MRP II: MRP II extends planning to capacity, labour and finance. Classic MRP stops at material quantities and due dates.
Not APS: Advanced Planning and Scheduling optimises against finite capacity and constraints; MRP assumes infinite capacity and fixed lead times.
Not inventory management: A warehouse system records and moves stock; MRP decides what to order or produce in the first place.
How MRP works
MRP runs a deterministic calculation in a fixed sequence. It starts from gross demand — sales orders, forecasts and the master production schedule — and explodes each finished product down through its bill of materials, level by level. For every component it nets the gross requirement against current stock, reserved quantities and open purchase or production orders. What remains is the net requirement. MRP then applies the part’s lead time to schedule the order backwards so the material arrives exactly when the next production step needs it.
The three classic inputs are often summarised as the MRP triad: the master production schedule (what to build and when), the bill of materials (what each product consists of) and the inventory record (what is on hand and on order). If any of these is wrong, the output is wrong — which is why master-data quality matters more for MRP than the algorithm itself.
Lot sizing and lead time
MRP does not simply order the exact net quantity. A lot-sizing rule decides how requirements are grouped into orders: lot-for-lot, fixed order quantity, period order quantity or economic order quantity. The choice trades ordering cost against holding cost. Lead time then shifts each planned order earlier in time; classic MRP treats lead time as a fixed parameter regardless of workload, which is one of its best-known weaknesses.
Strengths and limits
MRP is transparent, repeatable and cheap to run, which is why it remains the default in ERP. Its limits are equally well understood. It assumes infinite capacity, so it can generate plans that no machine or team can actually deliver. It is sensitive to nervous demand: small changes high in the BOM ripple into many rescheduling messages lower down. And fixed lead times ignore real queue times on the shop floor. These gaps are exactly what MRP II and later APS were built to close.
MRP in the ERP context
In a modern ERP, MRP is one planning run among several. Procurement teams use its order proposals as a worklist; planners review exception messages rather than every line. Many companies schedule MRP as an overnight batch, while high-volume or make-to-order businesses run it more frequently or move to demand-driven approaches. Understanding what MRP can and cannot promise — quantities and dates, but not feasibility against capacity — is essential to using ERP planning well.
Typical fields of application and industry examples can be found in the main article. Related concepts are shown in the internal links to our ERP glossary. The exact implementation depends on the industry, company size and depth of customisation of the specific ERP setup.
Which tools/systems support MRP?
Which ERP systems implement MRP particularly well can be found in our software overview with filter function. The exact implementation depends on the industry, company size and depth of customisation of the specific ERP setup. A well-founded answer always requires a look at the individual business processes and the strategic IT roadmap.
Which standards/norms are relevant for MRP?
Across all industries, GoBD and GDPR apply. Specific standards are documented in the main article. The exact implementation depends on the industry, company size and depth of customisation of the specific ERP setup.
Which certifications or training courses are available for MRP?
Training and certification offerings can be found under ERP training providers. Vendors often offer their own consultant certifications. The exact implementation depends on the industry, company size and depth of customisation of the specific ERP setup.
What alternatives are there to MRP?
Alternatives and complementary concepts are examined in the main article — see also the related glossary terms for distinctions. The exact implementation depends on the industry, company size and depth of customisation of the specific ERP setup. A well-founded answer always requires a look at the individual business processes and the strategic IT roadmap.
