How Does a Proper Material Requirements Planning System Operate?

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When it comes to your material requirements planning system, keeping up with the details is critical. 

You need a system that can help you keep up with all the details of the materials you need to keep running smoothly: where they are, when they’re running low, when it’s time to reorder, and even what supplier options you may have for acquiring those vital materials. 

Unfortunately, all too often, businesses, even manufacturers, find themselves running low on essential materials or struggling to keep up with demand. A proper material requirements planning system can help keep things moving much more smoothly for your business.

Determining Inventory Needs

Your material requirements planning system should keep up with the raw materials you will need based on several key factors, all of which may contribute to overall needs.

Materials Used

You may use the same materials for multiple products. For example, Product A, B, and C may all use Material X, while Product C and D both require Material Y. You might, depending on other factors, need to keep more of Material X on hand in order to ensure that you are prepared to meet the demand for all products. An effective material requirements planning system will help keep track of what materials you need the most of and how much of each one you may need in order to meet your production and inventory goals.


The demand for a specific product, or set of products, can have immense impact on how much you need to order of any given supplies. Sometimes, for example, you may notice a distinct increase in overall demand of a specific product, which means you may need to ramp up production. In order to increase production, you will need to have the right materials on hand–and your material requirements planning system can help you evaluate those needs.

In addition, you may need to track demand cycles or seasonal changes in demand so that you can be prepared for them ahead of time. Your material requirements planning system should provide you with essential insights into those needs so that you can shift your ordering practices accordingly. 


Some suppliers can get raw materials to you much faster than others. Many delays, from supply chain concerns to difficulty sourcing raw materials, can impact how long it takes you to get those materials in hand. An effective material requirements planning system will keep up with all the key supplier details that may help determine when you want to place your order, including:

  • Which suppliers have what materials (and which suppliers may have more than one material available, which could help decrease shipping costs)
  • Cost, including shipping cost to use a specific supplier
  • How long it usually takes to get goods from a specific supplier

With all that information in hand, you can easily determine when you need to place those orders and who you should order from in order to maximize return.

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Tracking and Shifting Inventory

In addition to keeping up with what materials are necessary, an effective material requirements planning system will also track what inventory is already on hand across not just a single facility, but across any facility where your business stores or uses those materials. Tracking your existing inventory can offer several key benefits.

Avoid Over-Ordering

Just like having too little of those key materials on hand can present a serious problem for your business, so can having too much of those materials. Often, excess orders become waste, especially if you have any perishable materials involved in your manufacturing process. Over-ordering can also lead to increased overall costs. 

Shift Materials When Needed

In some cases, you may need to shift materials around in order to optimize effectiveness. For example, suppose that you need a high quantity of a material at one facility, but have an excess of it at another. Instead of ordering more of that material for the facility that needs it, you can simply shift your inventory as needed. This simple strategy can go a long way toward cutting your overall costs and allowing you to manage your inventory more effectively. 

Track Trends

Not only should an efficient material requirements planning system keep up with your current inventory needs, it should provide you with key insights into current trends, which may offer greater overall insight for the future. With effective trend tracking, you can determine how trends spread across geographic areas and how you can predict future needs. 

Schedule Production Effectively

Your production schedule can depend on any number of things. For example, you may want to alter your production schedule if you have a high-demand order come in, pushing that order to the top of your priority list. On the other hand, if you know that demand will soon increase for a certain product, you may want to ramp up production early. 

Your material requirements planning system can help with two key factors.

Track Production Needs

When do you need to ramp up production for a specific item? When do you need to decrease production as a result of slowing demand or ordering practices? Through your material requirements planning system, you can better track those production needs, which may prevent you from ending up with unnecessary inventory on hand.

Have the Right Materials to Meet Production Needs

In addition to tracking your overall production demands, your material requirements planning system can accomplish another crucial goal: it can make sure you have the materials you need on hand, or moving through your facility, to meet those production needs. If you do not keep up with those materials, you may end up struggling to meet demand for key projects. 

Get a Material Requirements Planning System That Meets Your Needs

At StockIQ, we offer strategic inventory planning systems, including material requirement planning systems, which can help you better track and keep up with your material needs. Contact us today to learn more about the benefits our demand planning system can offer your business.

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