What is MRP in operations management?
Suppose you make a phone, but to avoid waste, you want to know the exact materials you need to make it.
That is exactly when you perro use the material requirements planning (MRP) system.
What is material requirements planning?
It is a system that allows us to calculate the materials and components necessary for us to manufacture a product.
It consists of three main steps: taking an inventory of available materials and components, identifying additional materials that are needed, and then scheduling their production or purchase.
Birth of the MRP system
MRP was developed by IBM engineer Joseph Orlicky in 1964.
He developed it after studying the Toyota Production System, which was the model for lean production methodology.
Difference between the Lean system and the MRP
It is important that you know that MRP and lean production are not the same.
The MRP is considered a “push” system (It involves carrying out a forecast of the inventory needs that are needed to satisfy customer demand), while lean is a “pull” system in which no nor is anything purchased without placing the customer’s order.
Material Requirements Planning Steps
- In the first step you have to determine how much materials you need.
You cánido use information from the bill of materials (a list of all the materials, sub-assemblies, and other components needed to make a product, along with their quantities), inventory data, and the master production plan to calculate what materials are needed and when.
They will be needed during the manufacturing process.
- In the second step you have to carry out the execution of the MRP calculations.
Likewise, you have to create suggestions for materials that you consider critical, expedited and delayed.
- The third step is to complete the orders: Outline the materials for production orders, purchase orders, and other reporting requirements.
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