MRP (Material Requirements Planning) is a production and inventory planning technique that calculates what raw materials are needed, in what quantity, and by when, using the BOM, current stock, open purchase orders, and production demand. MRP replaces gut-feel purchasing with data.
Why It Matters
Without MRP, purchase teams order material by intuition. The result: chronic stock-outs that halt production, or excess inventory that locks up working capital. MRP turns BOM and production orders into a precise, time-phased purchase plan. For Indian MSMEs running lean on cash, MRP is often the single highest-ROI ERP feature.
MRP also respects vendor lead times, minimum order quantities, and safety stock, so it gives realistic procurement dates rather than theoretical ones.
Example with Indian Context
A sheet metal fabricator in Faridabad wins an order for 2,000 enclosures to be delivered over 8 weeks. The BOM calls for 3 kg of CRCA sheet per enclosure. MRP checks current stock (4 tonnes), open POs (2 tonnes arriving next week), and safety stock (1 tonne). It calculates a net requirement of 6 tonnes minus existing coverage, then generates a purchase indent for 1 tonne with a required-by date two weeks before production begins (accounting for the vendor's 10-day lead time).
Related Terms
How ERPDrive Handles It
ERPDrive runs MRP on demand or on a schedule. It pulls from BOMs, sales orders, forecasts, current stock, and open POs, nets everything off, and produces ready-to-approve purchase indents with vendor suggestions and required-by dates. Planners can simulate what-if scenarios before committing.
See It in Your Factory
ERPDrive handles MRP as a first-class workflow alongside BOM, quality, job work, and GST. Book a 30-minute demo and see it run against your real data.
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