What is MRP (Material Requirements Planning)?

Material Requirements Planning (MRP) is a systematic approach to production planning, scheduling, and inventory control used in manufacturing. Its main purpose is to ensure that materials and products are available for production and delivery to customers, while keeping inventory levels as low as possible.

Key Objectives of MRP

Ensure material availability – that the right materials are in the right place at the right time.
Maintain low inventory levels – avoid excess stock and reduce carrying costs.
Plan production activities efficiently – schedule production based on demand and resource availability.

Core Inputs of MRP

MRP systems use three key types of data:

Master Production Schedule (MPS): What needs to be produced, and when.
Bill of Materials (BOM): A breakdown of all components, raw materials, and subassemblies needed for each product.
Inventory Records: Data on current stock, lead times, lot sizes, and reorder points.

How MRP Works

Starts with demand forecasts or customer orders.
Breaks down finished products into components using the BOM.
Calculates the net material requirements (what is needed minus what is already available in inventory).
Generates planned orders for raw materials, components, or production to meet deadlines.

Benefits of MRP

Reduces stockouts and production delays.
Improves production efficiency and resource utilization.
Aligns purchasing with actual production needs.
Supports compliance frameworks like GMP, HACCP, and ISO by ensuring traceability of materials and proper chain of MRP plays a key role in cannabis manufacturing by connecting recipes and Bills of Materials (BOMs) to inventory tracking, ensuring that cultivators and processors always know what raw materials, bulk ingredients, and packaging are required to produce compliant finished goods.