If you are looking for ways to streamline your manufacturing process, you might already have heard about MPS and MRP. But do you really know what each of them means and what is the difference between MPS and MRP? - Other than what the acronyms stand for.
In this article, Tigernix Software Experts explain what is MPS and MRP and what makes them different from each other in simple English. Let’s begin.
MPS or Master Production Schedule and MRP or Material Requirements Planning are two separate software systems that help you streamline your manufacturing process.
Before we discuss further MPS and MRP, let’s define demand. Demand is what drives any inventory planning and manufacturing system. Mainly there are two types of demands. They are
Independent Demand Item - An item whose demand comes directly from the customer. These items are also known as Top-level items and the demand for these items comes from Sales or Service Orders, or forecasts.
Dependent Demand Item - An Item whose demand depends on the Independent Demand Items or items that require to be produced. Usually, raw materials and subassemblies come under the dependent demand items. These items are also known as Lower Level Items.
For an example, in a garment manufacturing factory, a specific style of garment is an Independent Demand Item. The fabrics, threads, buttons, labels, embellishments...etc., that are essential to make the garment fall into the Dependent Demand Item category.
Since now you have a clear idea on what is Independent Demand and what is Dependent Demand Items, let’s discuss the differences between MPS and MRP.
Master Production Schedule (MPS)
In simple words, MPS helps you plan the manufacturing process of Independent Demand Items. It will help you plan your purchases depending on the customer demands or forecasts. Here the system plans the production of individual commodities considering a range of elements such as inventory costs, production costs, lead time, capacity, working hours, inventory levels, available storage...etc.
Although it won’t be considering every aspect of the production, the system can help achieve improved factory activity, accuracy, and viability leading you to a higher profitability. MPS run on a weekly bases depending on the orders and forecast period.
Material Requirements Planning (MRP)
MRP is quite similar to MPS in terms of the algorithm. The difference of MRP is that it plans for items needed to be produced. Or in other words for Dependent Demand Items. MRP will give you answers to,
- How much more do we need based on what we have?
- How much we need to purchase?
- How much we expect to consume?
Here the system will consider reordering levels, minimum quantities, order up to levels, and order multiples during the planning to fine-tune the orders to address the variation in demands while improving order economics and balancing order costs.
Plus, the system will help you to manage order due dates ensuring that the products arrive on time to meet the demand and order placement date to ensure lead time to give the supplier enough time to fulfil the order. Other main difference of MRP is that it runs daily to fulfil the material or parts needed to produce the plan.
MPS Vs MRP
|Plans Independent Demand Items||Plans Dependent Demand Items|
|Demand passed down directly from the customer||Demand passed down due an item needed to be produced|
|Runs on weekly depending on the forecasts or the demand||Runs daily|
MPS and MRP are two completely different systems that have some similarities. Although at this point you might feel like all you need is an MRP and there is no big deal in not having a MPS.
Yes, in many cases, you can use an MRP to plan for you Independent Demand Items. However, you won’t be able to include forecasts in the algorithm for your planning without a MPS. Another benefit of having separate MPS and MRP is that it will help you cope with the change requests come with new orders well with efficiency. Because your MRP will run frequently managing the products required while MSP will make sure you are on the production schedule