In real projects...

MRP outputs are only as honest as BOMs, routings, and lead times. Quality holds depend on lot traceability when material status changes.

A common issue we see...

Infinite capacity scheduling that ignores tool dies, oven slots, or skilled labor pools.

For example...

  1. Validate BOMs with engineering change control.
  2. Model finite resources for bottleneck work centers.
  3. Feed actuals back weekly to shrink planning noise.
  4. Separate make-to-order vs make-to-stock policies clearly.
  5. Measure schedule adherence and root-cause misses.

Common mistakes (and how to avoid them)

  • Letting phantom BOMs linger after redesigns.
  • Ignoring scrap and yield in material plans.
  • Weak integration between MES and ERP completions.
  • Over-relying on planners’ spreadsheets “because MRP is wrong.”

Note: Representative scenarios for education; validate planning rules with operations.

Methodology: This article is an educational guide built from public ERP documentation and widely used implementation patterns. Any mini “scenario walkthroughs” are illustrative and not client-specific.

MRP delivers reliable production plans only when bills of materials, lead times, and inventory data are accurate. This walkthrough builds the data discipline that makes MRP-generated plans actionable rather than advisory.

  1. Validate the bill of materials for each finished product: confirm components, quantities, and yield factors reflect current production methods, not the initial design specification.
  2. Verify inventory on-hand quantities in the ERP against a physical count for all components and raw materials used in the production schedule.
  3. Run MRP using confirmed sales orders and a planning horizon that covers the longest lead time in your supply chain.
  4. Review the MRP output: confirm that suggested purchase orders and production work orders align with actual capacity and supplier lead times before releasing them.
  5. Release work orders to the shop floor and record production confirmations—actual quantities produced, components consumed, and any substitutions or scrap.
  6. Run a post-production variance report comparing actual material consumption to BOM standard and investigate variances above threshold.

Artifacts to expect:

  • BOM validation record with effective date and approver.
  • Inventory accuracy audit results before MRP run.
  • MRP-generated purchase order and work order suggestions.
  • Released work orders with shop floor confirmation records.
  • Production variance report (actual versus BOM standard).

What usually goes wrong (failure modes)

  • MRP generates plans that production cannot execute because capacity is not constrained
    MRP plans assume infinite capacity and schedules more production in a period than the shop floor can realistically deliver.
    Mitigation: Configure capacity requirements planning alongside MRP, or review MRP output against actual capacity before releasing work orders to the shop floor.
  • BOM accuracy issues cause incorrect component shortages and excess orders
    The BOM in the ERP does not reflect current production methods, so MRP plans generate shortages for components that are no longer used and excess orders for items that have been substituted.
    Mitigation: Run a BOM accuracy audit before each major MRP planning cycle. Assign engineering ownership for BOM maintenance and define a change control process for BOM updates.
  • Inventory inaccuracies invalidate MRP starting positions
    On-hand quantities in the ERP do not match physical stock because goods receipts, production confirmations, and scrap transactions are not recorded in a timely manner.
    Mitigation: Establish a transaction timeliness policy: all inventory movements must be recorded in the ERP on the day they occur. Run daily inventory exception reports to identify unreported transactions.

Controls and evidence checklist

  • Require BOM approval for any component change, yield factor update, or new product structure.
  • Run a cycle count programme to maintain inventory accuracy above a defined threshold.
  • Review MRP output against capacity before releasing purchase or production orders.
  • Record production confirmations on the day of production, not at week-end.
  • Run a production variance report weekly and investigate variances above threshold.
  • Archive BOM change history with effective dates and approver records.

Implementation checklist

  1. Complete a BOM accuracy audit before the first MRP run—incorrect BOMs produce plans that damage credibility.
  2. Run a physical inventory count and reconcile to the ERP before go-live.
  3. Configure MRP planning parameters (safety stock, lead times, batch sizes) based on actual historical data.
  4. Train production planners to review MRP output before releasing orders, not to release automatically.
  5. Run the first MRP cycle in simulation mode and review with production management before any orders are released.
  6. Establish a daily production confirmation requirement and measure compliance in the first month.

Frequently asked questions

Where do teams usually lose time in ERP MRP and shop floor execution?

Most time is lost when the bill of materials in the ERP does not accurately reflect how production is actually carried out on the shop floor. BOMs that were loaded at implementation but never validated against current production methods create MRP plans that are consistently wrong, leading to shortages or excess stock that managers correct with manual overrides. A BOM accuracy audit before the first MRP cycle is the single most impactful pre-launch step.

What should we review during the first two MRP planning cycles?

Review work order completion rates and compare actual material consumption per work order against BOM quantities. Consistent over- or under-consumption against BOM standards indicates either the BOM is incorrect or shop floor processes have changed since the BOM was last updated. Both require a BOM review, not a system change. Also check that all production transactions are being recorded on the day they occur—delayed recording corrupts the next MRP starting position.

When should we adjust MRP planning parameters?

Adjust MRP parameters—safety stock levels, lead times, and minimum order quantities—when supplier performance changes, when demand patterns shift, or when new production lines with different cycle times are introduced. MRP plans are only as good as the parameters driving them, and parameters that were set at implementation often become outdated within eighteen months of production changes. An annual parameter review aligned with the production planning cycle is a reasonable standard.

Sources

Conclusion and next steps

MRP delivers reliable production plans when bills of materials are accurate, inventory positions are current, and production transactions are recorded on the day they occur.

Start with a BOM accuracy audit and a physical stock count. A day invested in data quality before the first MRP run produces more reliable plans than any amount of configuration tuning.