The Modern Manufacturer: MRP vs MPS – What, When, and How

by | September 28, 2021 | Dynamics 365 for Finance and Operations, Manufacturing

When utilized properly, Master Production Schedule (MRP) and Material Requirements Planning (MPS) work together to optimize resources and run production efficiently. Understanding the difference between MRP and MPS and appropriate times to use them is necessary for the most powerful production plan possible.

What is MPS?

The Master Production Schedule (MPS) is a priority plan for manufacturing and the main driver of the Materials Requirements Plan (MRP). Along with the bill of materials, the MPS can determine what components need to be purchased based on manufacturing quantity. The MPS indicates what, when, and how many items to produce. Additionally, the information that it generates can indicate product quantity able to be committed to a particular client. ATP / CTP are supported in Dynamics 365 Finance and Operations with MPS.

What is MRP?

Material Requirements Planning (MRP) plans items with “dependent” demand, which are passed along due to the need to produce a particular item. MRP decides how much material is required to have the appropriate inventory on hand for maximum production schedule operating efficiency. It uses the bill of materials required, along with knowledge of existing inventory and the master production schedule, to determine which materials to order.

Material Requirements Planning offers a flexible way to minimize inventory and optimize resources in production. The inputs of an MRP system are the Master Production Schedule (MPS), on-hand inventory information, scheduled receipts, and the bill of materials (and routes).

What is the Difference?

MPS operates through only one layer of the bill of materials, meaning it does not account for all BOMs required to produce a product, whereas MRP goes through all layers of the bill of materials. MPS is used to optimize bottlenecks, resource constraints, and capacity issues, yet MRP offers more flexibility with input and demand. MPS flows into MRP, which feeds the Capacity Requirements Plan (CRP). Most companies use MPS and MRP together to drive efficiency.

Production

Master Production Scheduling is often used when working in a make-to-stock environment where inventory is always on-hand. In environments with many end items, such as engineer-to-order and make-to-stock, MRP is typically used with minimal MPS input.

Most businesses Master Production Schedule certain products due to constraints or production requirements. Others are more flexible and able to run with extensive MRP.

Where Do We Master Schedule?

Master scheduling happens at the top of the build pyramid in custom manufacturing to ensure final assemblies are successful.

In repetitive manufacturing, a high number of raw materials produce a smaller number of subassemblies which result in many finished goods. Master scheduling is focused at the pinch point near the middle of production.

Commodity manufacturing produces many end items with few raw materials. Master scheduling happens close to the item source due to the importance of raw materials.

Where to focus master scheduling

Stocked End Item

MPS starts with manually created planned orders. Orders are then approved and firmed so the MRP does not remove them during the next run time. This creates production orders to be moved through the production process.

Coverage codes can be set to manual, but the net requirements screen and net requirement inquiries will not be available. If using periods, action messages are typically turned off because they are simply not helpful.

View our Microsoft technology solutions for the modern manufacturer infographic and visit the manufacturing section of the Stoneridge Software Blog to learn more about efficient manufacturing.

 

 

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