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Material requirements planning: definition and important aspects for purchasers
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Material Requirements Planning in a nutshell:
Material Requirements Planning (MRP) is a computerized system for calculating material requirements and optimal ordering times based on parts lists, stock levels and production plans. For purchasing, it enables precise, timely procurement and prevents both material bottlenecks and excessive stock levels.
Example: An automotive supplier uses MRP to determine the exact requirement of 4,000 microchips, 2,000 circuit boards and 6,000 housing parts for the production of 1,000 control units per week and to procure these in good time, taking into account the delivery times (6 weeks for microchips, 3 weeks for circuit boards).
Contents
Introduction to Material Requirements Planning
What is Material Requirements Planning (MRP)?
Material Requirements Planning (MRP) is a systematic process for planning and controlling material requirements in production companies. It ensures that the required materials are available in the right quantity and at the right time to guarantee a smooth production process. MRP takes into account production plans, bills of materials, stock levels and delivery times to enable purchasers to accurately forecast requirements.
Core elements of material requirements planning
Significance for purchasing
In purchasing, MRP plays a decisive role in efficient material supply and cost optimization. Precise requirements planning enables buyers to better bundle orders, take advantage of quantity discounts and reduce stock levels. MRP helps to avoid overstocking and minimize the risk of material shortages, which directly contributes to increasing the company's productivity and competitiveness.
Application of material requirements planning in practice
Material requirements planning (MRP) uses production plans, bills of materials and stock levels to determine the exact material requirements and the optimum time to order. It enables purchasers to plan orders effectively and avoid bottlenecks or excess stock.
Calculation example
Example: A company plans to manufacture 500 units of a product next month. Each unit requires 2 pieces of component A.
1. determine gross requirements:
Gross requirement = planned production quantity × requirement per unit
Gross requirement = 500 units × 2 units = 1,000 units
2. calculate net requirement:
Stock of component A = 200 pieces
Net requirement = gross requirement - stock level
Net requirement = 1,000 pieces - 200 pieces = 800 pieces
3. specify the order time:
Delivery time for component A = 2 weeks
Order date = production start date - delivery time
Assuming start of production on October 1 → Order date no later than September 17
Result for purchasing:
The purchaser should place an order for 800 units of component A by September 17 at the latest in order to ensure production.
Evaluation and strategic findings
✓ Critical success factors
→ Data accuracy: Precise parts lists and up-to-date inventory data are essential for reliable MRP calculations
→ System integration: Seamless connection between ERP, warehouse management and purchasing system for efficient processes
→ Supplier management: ensuring reliable delivery times and flexible supplier capacities
⚠ Challenges and limitations
→ Dynamic markets: fluctuating delivery times and material availability make precise planning difficult
→ System complexity: high maintenance effort for master data and planning parameters
→ Fluctuations in demand: Short-term changes in the production program require flexible adjustments
Future trends and developments:
"The integration of AI and machine learning will make MRP systems more intelligent and adaptive."
→ Predictive analytics for demand forecasts
→ Automated adjustment of safety stocks
→ Real-time optimization of order quantities
→ AI-supported supplier selection
◆ Strategic implications
→ Digitalization: investment in modern MRP systems with AI functionalities
→ Process optimization: Continuous improvement of planning accuracy through data analysis
→ Capacity building: training employees in data-driven decision-making
Conclusion on material requirements planning
Material Requirements Planning (MRP) is an indispensable tool for modern production companies. It enables precise material requirements planning, optimizes stock levels and reduces procurement costs. Despite challenges such as market dynamics and system complexity, new technologies such as AI and machine learning offer promising opportunities for further development. The success of MRP depends largely on data quality, system integration and effective supplier management.
