Also called MRP II
What is material requirements planning?
Working backwards from what you have promised to what you must order, and when.
What else it is called
- Other names
- MRP II
- In French
- planification des besoins matières
Related entries
Understanding material requirements planning
The calculation that turns promises into purchase orders. It takes the demand - firm orders plus forecast - explodes it through the bill of materials to get gross requirements at every level, subtracts what is already on hand or on order, and offsets each resulting net requirement backwards by its lead time to produce a date to buy or build.
It is arithmetic, and it is only as good as three inputs: an accurate bill of materials, accurate inventory records, and realistic lead times. This is why plants that implement it on top of inaccurate inventory get worse results rather than better ones - the system confidently recommends orders based on stock that is not there, planners learn within a month that it cannot be trusted, and they revert to the spreadsheets they had before. The investment is then lost, and it is almost never the software that was at fault.
The discipline that makes it work is unglamorous: cycle counting until records are reliably above about 95 per cent accurate, and keeping lead times current as suppliers change.
In practice
The prerequisite is inventory accuracy. Running this on counts that are 85 per cent right generates orders nobody trusts, and once planners stop trusting it they go back to spreadsheets and the investment is lost.
Frequently asked
What inventory accuracy do we need before turning this on?
Aim above 95 per cent by part number before you rely on the output. Below that the recommendations are wrong often enough that planners stop reading them, and recovering their trust afterwards is harder than earning it the first time.
What is the difference between this and an enterprise resource planning system?
Material requirements planning is the calculation. An enterprise resource planning system is the whole business platform that contains it along with purchasing, inventory, costing, sales and finance. You do not buy them separately in 2026; you do need to know which part is misbehaving.