“We have MRP, but it never gives us the right plan.”
I hear this all the time and it’s no surprise.
MRP is one of the most powerful tools in supply chain. But it’s only as good as what you feed it.
When MRP fails, disaster follows:
- Wrong materials ordered
- Wrong quantities received
- Wrong time frames for production
The truth is simple: MRP works when the inputs are.
Here’s your 21-point checklist to keep it sharp, clean, and reliable.
1. BOMs Are Complete
Watch for: Missing components that stop production.
Example: A chocolate bar maker forgets to include wrappers in the BOM. Production is complete but nothing can be shipped.
Fix: Validate every BOM before MRP runs. Ensure all raw, intermediate, and packaging items are included.
2. Supplier Data Is Accurate
Watch for: Outdated or incorrect supplier details.
Example: MRP creates a PO for a supplier that no longer exists in the approved list. Procurement scrambles to reassign it.
Fix: Maintain a clean supplier master with up-to-date contacts, approval status, and payment terms.
3. Lead Times Reflect Reality
Watch for: Unrealistic lead times that trigger false promise dates.
Example: System still shows 8 weeks for motors, but the supplier now averages 12. The line stops waiting for parts.
Fix: Review supplier performance quarterly. Update lead times based on actual receipts, not assumptions.
4. MOQ and Freight Terms Defined
Watch for: Orders that don’t meet supplier requirements.
Example: MRP suggests buying 80 units, but MOQ is 100. The supplier rejects the PO.
Fix: Enter accurate MOQs, incoterms, and freight details into the system to avoid invalid recommendations.
5. Open POs Not Reconciled
Watch for: Old POs still open in the system.
Example: MRP thinks 500 units are arriving next week, but that PO was canceled months ago.
Fix: Review open PO reports weekly with suppliers. Update ETAs and closures promptly.
6. On-Hand Inventory Inaccurate
Watch for: Phantom stock or missing materials.
Example: System shows 1,000 connectors available, but only 600 are on the shelf. MRP doesn’t trigger replenishment.
Fix: Perform regular cycle counts and correct discrepancies immediately.
7. In-Transit and Transfers Ignored
Watch for: Missing inventory that’s “on the road.”
Example: A plant-to-plant transfer is in progress, but MRP assumes zero stock. A duplicate PO is raised.
Fix: Include in-transit inventory and transfer lead times in MRP calculations.
8. MPS Out of Sync
Watch for: MRP running on outdated demand.
Example: Marketing updated the forecast, but the MPS wasn’t refreshed. MRP plans for obsolete SKUs.
Fix: Always run MRP using the latest approved MPS.
9. Safety Stock Static
Watch for: Safety stock that doesn’t change with volatility.
Example: Supplier delays rise, but safety stock stays low. Stockouts increase across A-class items.
Fix: Recalculate safety stock using demand variability and supplier performance every quarter.
10. Planning Horizons Undefined
Watch for: Short-term chaos and long-term blind spots.
Example: The team only plans three weeks out, missing the 12-week lead time for packaging film.
Fix: Set clear horizons: short-term (frozen), mid-term (flexible), long-term (tentative).
11. Item Planning Policies Wrong
Watch for: Incorrect lot-sizing rules.
Example: MRP creates multiple small orders for a high-setup process. Efficiency drops.
Fix: Assign appropriate policies: lot-for-lot, fixed lot, or reorder point, based on product behavior.
12. Production Lead Times Off
Watch for: Inaccurate routing data.
Example: A work center that used to take 6 hours now takes 9 due to equipment wear. MRP underplans capacity.
Fix: Validate production lead times quarterly with operations data.
13. Alternate Sourcing Missing
Watch for: Single points of failure.
Example: A sole supplier misses delivery, and MRP has no alternate source to switch to.
Fix: Add dual or backup suppliers for critical components.
14. Substitution Rules Absent
Watch for: Inability to react to part shortages.
Example: Alternate battery models exist, but substitution rules aren’t in the system. MRP shows shortages unnecessarily.
Fix: Define substitution rules in item master to allow smooth swaps during crises.
15. Shelf-Life Not Managed
Watch for: Expired or aging materials.
Example: Lubricants with a 12-month shelf life expire in storage. MRP keeps reordering new stock.
Fix: Incorporate expiration and aging controls in planning parameters.
16. Exception Messages Ignored
Watch for: Alerts dismissed as noise.
Example: An expedite message was overlooked for a key component. Two weeks later, production halts.
Fix: Review and act on exception messages daily. They’re your early-warning system.
17. Planner Buy Reports Ignored
Watch for: Blind reliance on system output.
Example: MRP suggests a buy, but supplier acknowledgments show a conflicting delivery.
Fix: Reconcile planner buy reports with supplier confirmations weekly.
18. Supplier Confirmations Missing
Watch for: PO assumptions not validated.
Example: Supplier never confirmed delivery date. MRP expects materials that won’t arrive.
Fix: Require PO acknowledgments before finalizing production schedules.
19. Feedback Loops Absent
Watch for: Repeating the same errors.
Example: MRP keeps suggesting expedited orders because lead times are wrong, but no one fixes them.
Fix: When MRP fails, document root causes and adjust master data.
20. Data Ownership Unclear
Watch for: No one accountable for bad parameters.
Example: Planning blames Procurement, Procurement blames Master Data. Nothing improves.
Fix: Assign clear data owners for BOMs, suppliers, lead times, and item policies.
21. No Continuous Improvement
Watch for: “Set and forget” mentality.
Example: Parameters haven’t been reviewed in a year. The system drifts into unreliability.
Fix: Run monthly MRP health checks to keep inputs accurate and outputs actionable.
What You Can Do This Week
Pick one product family and test this checklist.
Audit your lead times, safety stocks, and open POs.
You’ll quickly see which bad inputs are sabotaging your MRP.
Conclusion
MRP is math.
If your master data is wrong, MRP magnifies the chaos.
But if you keep these 21 checks alive, you’ll turn MRP into what it was designed to be. It will work just fine.
