Material requirements planning (MRP) turns a production plan into a buying plan: how much of each ingredient and packaging item you need, and when to order it so it arrives in time. For each material and each week it works down six rows. Gross requirements: the runs planned that week times the amount per run. Scheduled receipts: orders already on their way. Net requirements: how much more you need to stay above your safety stock. Planned receipts: that need rounded up to the supplier's order multiple and minimum. Projected on hand: what's left at the end of the week. Planned order releases: the planned receipts moved back by the lead time, the week you place the order. The most useful thing an MRP grid shows is the order that's already late: something needed sooner than its lead time allows. In the example below, a granola maker plans six weeks before the holidays and finds two orders it should have placed already. Below are the rows, the example, and a free grid.
The short version
- MRP turns a production plan into what to order and when.
- Gross requirements = runs planned × amount per run.
- Net requirements = what's needed beyond on hand, orders on the way and safety stock.
- Planned receipts round the need up to the order multiple and minimum.
- Planned order releases are the receipts moved back by the lead time.
- An order needed sooner than its lead time is already late.
- TaroStack plans what to make and what to buy on Standard at $99 a month. More below.
The rows
| Row | How it's worked out |
|---|---|
| Gross requirements | Runs planned that week × the amount per run, from the recipe |
| Scheduled receipts | Orders already placed, in the week they arrive |
| Net requirements | Safety stock − (last week's on hand + scheduled receipts − gross requirements), if above zero |
| Planned receipts | The net requirement rounded up to the order multiple, at least the minimum |
| Projected on hand | Last week's on hand + scheduled receipts + planned receipts − gross requirements |
| Planned order releases | Each planned receipt, moved earlier by the lead time |
The production plan itself is in production schedule example, and the bill of materials behind "amount per run" in bill of materials for food.
An example: a granola maker before the holidays
Cache Valley Granola Co., the made-up granola maker in Logan, Utah, I use in these examples, makes granola in 120-pound runs of 150 bags and plans 2, 3, 3, 4, 4 and 5 runs over the next six weeks. Four materials:
| Material | Per run | On hand | Safety stock | Order multiple | Minimum | Lead time |
|---|---|---|---|---|---|---|
| Rolled oats | 52.8 lb | 200 lb | 50 lb | 50 lb | 50 lb | 1 week |
| Almonds | 14.4 lb | 60 lb | 25 lb | 25 lb | 25 lb | 2 weeks |
| Honey | 16.8 lb | 90 lb | 30 lb | 60 lb pail | 60 lb | 1 week |
| Printed bags | 150 | 600 | 300 | 500 | 2,000 | 3 weeks |
The oats, worked through, with 500 pounds already arriving in week 2:
| Oats, week | 1 | 2 | 3 | 4 | 5 | 6 |
|---|---|---|---|---|---|---|
| Gross requirements | 106 | 158 | 158 | 211 | 211 | 264 |
| Scheduled receipts | 500 | |||||
| Net requirements | 0 | 0 | 0 | 0 | 195 | 259 |
| Planned receipts | 0 | 0 | 0 | 0 | 200 | 300 |
| Projected on hand | 94 | 436 | 278 | 66 | 55 | 91 |
| Planned order releases | 200 | 300 |
The oats are fine: order 200 pounds in week 4 and 300 in week 5. The grid flags two problems. Almonds need 50 pounds by week 2 on a two-week lead time, so that order is already late; the supplier's rush delivery costs more but saves the runs. Printed bags need 2,000 by week 2 on a three-week lead time, and the 600 on hand cover only until then; the second order of 2,000 for week 5 goes in at week 2, and week 2's bags come from 150 plain kraft bags with stickers while the printer catches up. Honey needs a 60-pound pail every week through week 5. How the recipe and run are built is in how to make granola in bulk.
Get the grid
Download the MRP grid. One sheet: type the runs planned each week, and for each material its amount per run, on hand, safety stock, order multiple, minimum, lead time and any orders already on their way; gross and net requirements, planned receipts, projected on hand, planned order releases and anything already late fill in, with orders to place in red. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
Six weeks and four materials fit on a sheet. Twelve products sharing thirty ingredients, plans that change on Monday, and lead times that slip make the grid stale before it's printed.
How TaroStack does it
TaroStack's planning works from your recipes, stock and suppliers, and says what to make and what to buy.
What to buy, from the plan. Planning works out what each planned batch needs from its recipe, against what's in stock and on order, and says what to buy and when, with each supplier's lead time and minimum.
Lead times checked against reality. What a supplier promises is compared with how long its deliveries really take, so a lead time that slips shows up before the grid is wrong.
The reorder list, on every plan. Without planning, the reorder list shows each item in days of cover, with each supplier's lead time and minimum, and reorder points suggested from how stock actually moves.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What a plan needs | Runs × recipe, by hand | From the recipes |
| What to order and when | An MRP grid | Planning's buying list |
| A late order | Spotted, or not | On the buying list, by date |
| Lead times | What the supplier said | Checked against deliveries |
Planning, what to make and what to buy, is on Standard at $99 a month; recipes, batches and the reorder list are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.