What is MRP Software?

What is MRP software? 

Manufacturing Resource Planning software is a comprehensive computer-based system designed to help businesses effectively plan and manage their manufacturing operations. It integrates various aspects of production such as materials, labor, equipment and scheduling to streamline the entire manufacturing process. 

MRP software enables manufacturing companies to effectively manage their resources, optimize production processes, and maximize overall operational efficiency. By leveraging real-time data and analytics, MRP software assists businesses in making informed decisions, optimizing resource allocation, and improving overall productivity.

Core features of manufacturing resource planning software

It’s worth noting that the specific features and functionalities of MRP software can vary across different vendors and solutions, so businesses should definitely evaluate their specific needs and requirements when selecting an MRP software system. With that said, here are five features commonly found in MRP software:

  • Production planning and scheduling: MRP software helps to create accurate production plans and schedules by considering factors such as resource availability, order priorities and production capacity to optimize the sequencing and timing of manufacturing tasks.
  • Inventory management: Effective inventory management is critical for manufacturing operations, so MRP software provides real-time visibility into inventory levels, tracks material usage and automates reorder points. 
  • Resource allocation: MRP software optimizes the allocation of manufacturing resources such as labor and equipment. It considers factors like skill sets, availability and capacity to assign the right resources to specific production tasks. 
  • Supply chain management: MRP software plays a crucial role in managing the supply chain by enabling businesses to track and manage the flow of materials, monitor supplier performance and streamline procurement processes. 
  • Reporting and analytics: MRP software provides reporting and analytics capabilities to support data-driven decision-making. It generates real-time reports on key manufacturing metrics like inventory levels, production performance, resource utilization, and customer orders. 

Benefits of MRP software

  • Enhanced efficiency: MRP software optimizes production processes, reduces manual tasks and automates routine operations. This leads to improved efficiency, reduced errors and increased throughput, ultimately enhancing overall productivity.
  • Improved planning and decision making: With accurate real-time data and insights provided by MRP software, businesses can make informed decisions regarding production planning, resource allocation, and inventory management. This helps optimize operations, respond swiftly to changes, and adapt to market demands effectively.
  • Cost reduction: By minimizing inventory carrying costs, avoiding stock-outs and optimizing resource utilization, MRP software helps businesses reduce costs and improve profitability. It also enables manufacturers to identify areas for cost-saving and process improvement, which contributes to long-term financial success.
  • Better customer satisfaction: MRP software facilitates improved order fulfillment and on-time delivery by aligning production with customer demand. By ensuring timely delivery of high-quality products, businesses can enhance customer satisfaction and build stronger customer relationships.

Graph describing the five main features and benefits of MRP software

Primary modules in MRP software

  • Material requirement planning (MRP): The MRP module is the core component of manufacturing resource planning software. It helps businesses determine the necessary raw materials, components, and sub-assemblies required for production based on demand forecasts and production schedules. 
  • Production planning and scheduling: The production planning and scheduling module enables businesses to create efficient production plans and schedules. It considers factors such as resource availability, production capacity, and order priorities to optimize the sequencing and timing of manufacturing tasks.
  • Inventory management: This module allows businesses to track and manage their inventory in real-time. It provides visibility into stock levels, locations, and usage, enabling accurate inventory control and replenishment.
  • Shop floor control: The shop floor control module focuses on managing the manufacturing activities on the shop floor. It allows businesses to monitor and control the progress of production orders, track work-in-progress, and collect data on actual production times and quantities. 
  • Quality management: The quality management module ensures that manufacturing processes adhere to defined quality standards and specifications. It facilitates the tracking and management of quality control parameters, inspection results, and non-conformance reports. 
  • Supply chain management: The supply chain management module in MRP software encompasses activities related to procurement, supplier management, and logistics. It enables businesses to monitor supplier performance, track material deliveries, and streamline procurement processes. 

Graph describing features of six main MRP software modules

Open source vs. proprietary manufacturing resource planning software

When considering the adoption of MRP software, businesses have the option to choose between open source and proprietary solutions. Each type of software has its own set of advantages and considerations to keep in mind:

Open Source MRP Software

  • Flexibility and customization: Because open source software is built off an openly accessible source code, it can be modified and customized to meet the specific needs of each individual business. This level of flexibility empowers companies to adapt the software to their unique manufacturing processes, workflows, and industry requirements- something that can’t really be done with a proprietary option.
  • Innovation: Because open source allows for customization, it naturally fosters an environment ripe with innovation. This is one of the key reasons organizations choose to go the open source route, and it’s definitely one of the biggest and most exciting advantages this type of software has to offer.
  • Cost-effectiveness: Open source software often carries a significant advantage in terms of cost due to the fact it doesn’t have recurring license fees. This cost-effectiveness enables small and medium-sized enterprises to access robust resource planning tools that might otherwise be financially out of reach, as well as larger organizations looking to cut down on their tech expenditures.
  • Community support and collaboration: Each open source software has a corresponding community of organized developers and users who contribute to its ongoing improvement. They make themselves available to update and improve the source code, answer questions and provide education opportunities for other users and developers of that software. This community support ensures that any issues or bugs are swiftly addressed, security vulnerabilities are patched, and new features are introduced more rapidly. 

Proprietary MRP Software

  • Convenience: Proprietary MRP software is an off-the-shelf solution that often doesn’t require the same level of time, integration and potential development of an open source solution, which makes it perfect for organizations that don’t want anything customized and who know that all their needs can be met through one package offering. 
  • Vendor support: Whereas open source software users rely on their software’s adjacent community and/or a trusted open source service provider, proprietary software vendors offer technical assistance and regular updates to their users in house. This can be nice for proprietary users because they don’t have to do any additional work to seek out help and support when they need it. 
  • Simple: While each software solution is going to vary somewhat in its overall complexity, there is a simplicity to choosing a proprietary software option that’s ready to go right off the shelf. 

The choice between open source and proprietary MRP software ultimately depends on the unique needs, resources, and priorities of each manufacturing organization.

Regardless of which option an org chooses, careful evaluation and consideration of specific requirements will lead to the selection of the most suitable MRP software, which will ultimately optimize manufacturing operations and drive growth.

Apache OFBiz MRP software

Apache OFBiz is an open source ERP solution that includes a robust MRP module. Developed and maintained by the Apache Software Foundation, Apache OFBiz provides a comprehensive suite of business applications, including MRP, to streamline manufacturing operations. Let’s explore some key features and benefits of Apache OFBiz MRP software:

  • Material requirement planning (MRP): The Apache OFBiz MRP module enables businesses to effectively manage their material requirements. It considers factors such as sales forecasts, production schedules, and inventory levels to generate accurate material requirement plans. By automating purchase requisitions, tracking lead times, and optimizing inventory levels, Apache OFBiz MRP ensures efficient resource allocation and inventory control.
  • Production planning and scheduling: The MRP module within Apache OFBiz facilitates efficient production planning and scheduling. It helps businesses optimize their production processes by considering resource availability, production capacities, and order priorities. The module allows for the creation of production plans, sequencing of tasks, and real-time monitoring of progress. This leads to improved production efficiency, reduced downtime, and better adherence to delivery schedules.
  • Inventory management: Apache OFBiz MRP software provides robust inventory management capabilities. It enables businesses to monitor stock levels, track material movements, and automate reorder points. With real-time visibility into inventory, businesses can optimize stock levels, minimize stockouts, and avoid excess inventory. The module also supports inventory valuation methods and provides insights into inventory costs for accurate financial reporting.
  • Shop floor control: The shop floor control capabilities in Apache OFBiz MRP module allow businesses to monitor and manage manufacturing activities on the shop floor. It provides real-time visibility into work orders, work-in-progress (WIP), and production statuses. This enables businesses to track task progress, allocate resources efficiently, and identify potential bottlenecks. The module helps manufacturers maintain production schedules, improve resource utilization, and ensure timely order fulfillment.
  • Reporting and analytics: Apache OFBiz MRP software includes reporting and analytics features that enable businesses to make data-driven decisions, identify areas for improvement, and optimize manufacturing processes. It offers customizable reports, dashboards, and key performance indicators (KPIs) to monitor and analyze production performance, inventory levels, and resource utilization.
  • Open source advantage: Because it’s an open source solution, Apache OFBiz MRP software offers the advantages of flexibility and customization. Businesses can modify and extend the software according to their specific requirements, integrate it with other systems or build additional custom functionality. 

Graph explaining the six key features of Apache OFBiz MRP software

How to choose an MRP Software

Selecting the right MRP software is a crucial decision that can significantly impact your manufacturing operations. To ensure you choose the most suitable solution for your business, consider the following factors:

Assess your business needs

Start by evaluating your specific business requirements. Identify the key challenges and pain points you want the MRP software to address. Determine the must-have features and functionalities that align with your manufacturing processes and goals.

Scalability and integration

Consider the scalability of the MRP software. Assess whether it can accommodate your business growth and handle increased production volumes. Additionally, evaluate the software’s ability to integrate with other systems you use, such as CRM and accounting softwares, or supply chain management tools.

Reputation and support

Research and evaluate the reputation and track record of MRP software vendors/projects. Look for those with experience in the manufacturing industry and a solid customer base. Read reviews, seek recommendations, and assess available customer support services.

Customization and flexibility

Assess the level of customization and flexibility offered by the MRP software. Determine if it can adapt to your unique manufacturing processes and workflows. Consider whether the software allows for the addition of custom fields, workflows, or reports. Customizability ensures that the MRP software can be tailored to fit your specific business requirements.

User-friendliness and training

Evaluate the user-friendliness of the MRP software. An intuitive interface and easy navigation contribute to user adoption and efficiency. Consider whether the software offers training materials, documentation, or training sessions to familiarize your team with the software’s functionalities, as adequate training and support are essential for successful implementation and utilization.

Cost and ROI

Consider the total cost of ownership for the MRP software. Evaluate both upfront costs, such as licensing fees, implementation, and hardware requirements, as well as ongoing costs, such as support and maintenance fees. Remember to factor in long-term scalability and potential cost savings achieved through improved efficiency.

Demo and evaluation

Request a demo or trial of the MRP software before making a final decision. Use this opportunity to evaluate the software’s user interface, functionality, and ease of use. Involve key stakeholders from your manufacturing team to gather their feedback and assess the software’s suitability for your business processes. Ask specific questions and seek clarification on any concerns or doubts you may have.

By thoroughly evaluating these factors and involving key stakeholders, you can make an informed decision that aligns with your manufacturing processes and contributes to the overall efficiency and success of your business.

MRP software in a nutshell

Manufacturing Resource Planning software is a powerful tool that empowers businesses to optimize their manufacturing operations. By integrating various aspects of production and resource management, MRP software enables companies to achieve higher efficiency, reduce costs, and meet customer expectations. Embracing MRP software can be a game-changer for manufacturers seeking to thrive in today’s competitive landscape.

Graph with five benefits of MRP software


DATE: May 31, 2023
AUTHOR: HotWax Systems