MRP stands for Material Requirements Planning, a methodology that calculates what materials a business needs to order, and when, to meet production and sales demand. It takes into account current stock levels, open sales orders, production schedules, supplier lead times and reorder quantities to generate a planned purchasing and production schedule. In Microsoft Dynamics 365 Business Central, MRP runs in the planning worksheet and is a core feature for manufacturers and distributors.
How MRP works in Business Central
Business Central's MRP runs against the demand plan, which includes confirmed sales orders, production orders and service requirements, and the current supply position: stock on hand, open purchase orders and in-progress production. It identifies gaps where demand will exceed supply and generates suggested purchase and production orders timed to supplier and production lead times. Planners review these in the planning worksheet before confirming them.
MRP in practice for UK manufacturers
- A contract electronics manufacturer uses Business Central's MRP to plan component purchasing 12 weeks ahead, avoiding both stock-outs that stop production and excess stock that ties up cash.
- A food manufacturer runs MRP daily as new customer orders are confirmed, automatically adjusting the production plan and raw material purchase schedule.
- A distributor combines MRP with reorder point planning, ensuring high-velocity lines replenish continuously while slow-moving items are planned against firm demand.
- A made-to-order manufacturer uses MRP to explode the bill of materials for each new sales order, generating all component purchase orders needed to meet the delivery date.
How Advantage implements MRP in Business Central
MRP requires careful setup to produce reliable results. Lead times, safety stock levels, lot sizes and planning parameters must all be configured correctly. Advantage runs structured workshops with production and procurement teams to set these parameters before go-live.
Frequently Asked Questions
What is the difference between MRP and MRP II?
MRP covers material and component planning. MRP II extends this to capacity planning, labour and machinery scheduling. Business Central supports both, allowing manufacturers to plan materials and capacity in one system.
How accurate does data need to be for MRP to work?
MRP is only as accurate as the data it runs on. Stock levels, bills of materials, lead times and demand data all need to be maintained accurately. Establishing good data quality processes is a key part of every manufacturing Business Central implementation.
Can MRP in Business Central handle multi-level bills of materials?
Yes. Business Central's planning engine handles multi-level BOMs, exploding demand through each level to generate purchase and production orders for sub-components and raw materials at every level.
