MRP for small manufacturers: what to buy before you build

What MRP does

MRP takes the products you plan to make, explodes each BOM into raw materials, subtracts stock you already hold and shows the shortfall. Done in Excel, this goes stale the moment stock changes. In an ERP it uses live stock and live BOMs.

A worked example

The demo plan is 150 control panel enclosures. Each needs 4 kg of sheet, one fastener kit and 0.2 kg of paint. Against stock on hand, the production plan shows the following.

Reading the table

Projected stock is what you hold, adjusted for orders already placed and stock reserved. The To buy column is the requirement minus that projected stock.

How to run it

• Keep BOMs submitted and accurate, since MRP is only as good as the BOM.
• Keep stock current by recording every receipt and issue.
• Create a production plan, add the items and quantities, and set the warehouse.
• Review the raw materials table and turn the shortfall into material requests or purchase orders.
• Create work orders for the items you plan to build.

What MRP cannot fix

Wrong BOMs and wrong stock produce wrong answers faster. Before turning on planning, count stock and clean the BOMs. We do this in discovery, before any configuration.

Excel or ERP?

• Excel is fine for one product, one location and one person updating stock.
• Move to an ERP when stock is held in several places, several people update it, or one BOM change should update every plan.

Frequently asked questions