What is MRP (Material Requirements Planning)?
A system for planning manufacturing materials and production scheduling based on demand forecasts and bills of materials.
Definition
Material Requirements Planning (MRP) is a production planning and inventory control system used to manage manufacturing processes. MRP takes inputs from sales orders, forecasts, and bills of materials (BOMs) to calculate what materials are needed, how much, and when — generating purchase orders and production schedules automatically. MRP evolved into MRP II (Manufacturing Resource Planning) which added capacity planning and shop floor control, and eventually became a core module within modern ERP systems.
How MRP Works in ERP
In an ERP system, MRP is typically a module within the manufacturing or supply chain suite. It reads demand signals (sales orders, forecasts), explodes BOMs to determine component requirements, checks current inventory levels, and generates planned purchase orders and production orders. Modern ERP systems extend MRP with capacity planning (CRP), advanced planning and scheduling (APS), and real-time shop floor integration.
ERP Vendors with Strong MRP
SAP S/4HANA Public Cloud
Standardised cloud ERP with quarterly auto-upgrades and low TCO
Microsoft Dynamics 365
Modular ERP + CRM tightly integrated with Microsoft 365
Epicor Kinetic
ERP built for manufacturers — from job shop to enterprise
Infor CloudSuite
Industry-specific cloud ERP suites on AWS
Frequently Asked Questions
What is the difference between MRP and ERP?
MRP focuses specifically on manufacturing materials planning and production scheduling, while ERP encompasses the entire business — finance, HR, supply chain, CRM, and more. MRP is typically a module within a larger ERP system.
Which ERP systems have the best MRP?
SAP S/4HANA, Epicor Kinetic, Infor CloudSuite, and Dynamics 365 Supply Chain Management are known for strong MRP capabilities. For smaller manufacturers, SYSPRO and Acumatica also offer solid MRP.