What Is MRP Software?

The History of MRP Software

MRP, or Material Requirements Planning, originated around the 1960s and 1970s. It focuses on the planning process of manufacturing, from what products to buy, how much, to when and from who. This is all based on the supply and demand of a product. In the 1980s, software to automate MRP took off, however, many people still are asking “What is MRP software?”

Since many do not know what MRP software is, they often don’t know how it can help their business either. We’ve highlighted three areas of manufacturing that often are prone to mistakes, and how MRP software can help.

  1. Supply
    One of the most common problems in manufacturing is not knowing how much inventory you truly have. This leads to mistakes like under ordering, and leaving your customer to scramble with a different vendor, or over ordering and not being able to sell and turn a profit. MRP software solves this problem through integration with your ERP or business solution. The MRP software always knows how much you have, and automates the ordering process.
  2. Dates
    A schedule is extremely important in planning out your supply chain. There are often factors that get overlooked which have an effect on the supply chain and how it flows, such as how long it takes the material to move from the vendor to you and the possibility of down time on a machine or work center. MRP software takes these into account when scheduling the arrival of new material and when the product will leave.
  3. Quantity
    Sometimes manufacturers need to use different units of measures based on whether they are stocking, purchasing, manufacturing or selling. This can create chaos, confusion and errors if not done correctly and if done manually. MRP software can automate the process of deciding how much needs to purchased, manufactured, stocked or sold.

There are a lot of issues and mistakes that can surface in supply chain management and manufacturing when doing these processes manually. MRP software was created to make this process easier, and as close to flawless as possible.

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