MRP and MPS

MPS (Master Production Schedule) plans items that have "direct" demand or ("independent" demand). This demand comes directly from customer requirements or forecast requirements. MPS is run weekly based on orders and forecasts for that period. Thus, MPS is a channel that connects sales and operations.

MRP (Material Resource Planning) plans items with a "dependent" demand that originates from the need to produce an item. MRP runs daily to expedite the parts required to accomplish the plan.

MPS (Master Production Schedule) is very similar to MRP (Material Requirements Planning), but here is one significant difference.

MPS takes care of items that have "direct" demand, or in other words, "independent demand". This demand comes directly from customer requirements or forecasting requirements via Sales Orders, Service Orders, or forecasts.

On the other hand, MRP is a "dependent" demand originating from a need to produce an item. Therefore, if we produce engines (finished goods), the engine itself is an MPS item, and the engines' parts, such as crankshaft and pistons, are MRP items. Therefore, MRP items can be both purchased and manufactured when MPS items are usually manufactured parts.

According to the example above, we run MPS to outline the production plan for finished goods weekly. The "Finished Good" plan is based on the sales orders and forecast for that period supposed to be rigid. Therefore, the plan provides constancy because we want to minimize machines' setup time and maximize productivity.

Our production plan for the week is a source for MRP that runs daily and creates a "depended" demand to expedite purchased and manufactured items to fulfill the "Finished Good" plan previously generated by MPS.

Companies shall run MPS separately from MRP to keep the "Finished Good" plan as untouched as possible during the week. This approach allows refraining from dealing with new orders and significant requirements changes daily. Once you have a weekly plan created by MPS, you may run MRP more frequently, even several times a day, to address minor changes in the production schedule.