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Material Requirements Planning (MRP)

Definition - What does Material Requirements Planning (MRP) mean?

Material requirements planning (MRP) is a type of planning focused on the management of processes in manufacturing industries. MRP looks at the availability of materials for production and other related metrics.

Techopedia explains Material Requirements Planning (MRP)

One aspect of material requirements planning is inventory control. This type of internal inventory handling is just one of a set of methodologies, tools and resources that corporate executives and other leaders use in order to balance the availability of resources with the necessity to maintain lean inventories and avoid overstocking. Smarter purchases and more oversight of materials handling in the supply chain in general can lead to increased profits for a business and more efficient processes that require less additional management and labor.

Various types of material requirements planning include reporting based on physical remainders after manufacturing processes, and other sophisticated systems that use bar code or tagging technologies to show how many materials are used in a given production cycle. Professionals also talk about "next generation MRP," where even newer tools allow for more automation of materials demand management. For example, highly computational resources could analyze supply chain details and create buffers for any changes that may occur in a business process. All of this is intended to keep business processes going smoothly and automatically as they are provided with the materials they need when they need them.

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