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by QT9 Software on June 10, 2025
Material requirements planning (MRP) software calculates what materials a manufacturer needs to buy or produce, how much and when. It does this by comparing customer demand and production schedules against current inventory, supplier lead times and a product's bill of materials (BOM). MRP software automates the planning work manufacturers once did by hand or in spreadsheets, so the right materials arrive at the right time without tying up cash in excess stock.
Whether it’s the struggle to find skilled labor or maintain a reliable supply chain, hurdles abound in the manufacturing industry. This can be especially true for small manufacturers, who often operate with fewer resources, tighter margins and less flexibility than larger competitors.
Automation is one bright light for small manufacturers, and material requirements planning tools like MRP software fit the bill. By creating efficiencies and promoting accuracy, MRP software helps small manufacturers meet challenges with greater agility.
Designed to streamline and automate the production planning process, MRP software helps small manufacturers gain better control over their materials, scheduling and inventory. In this beginner’s guide, we’ll break down what MRP software is, how it works and why it’s an essential tool for small manufacturers looking to stay competitive in a demanding market.
Contents
Benefits of MRP software for small manufacturers
When to invest in MRP software
How much does MRP software cost?
Small manufacturers get the most out of QT9 ERP's MRP module
What is MRP software?
Material requirements planning, or MRP, is the process of determining the appropriate types and amounts of materials needed to produce a good, and ensuring those materials are available when they are needed for production. The process consists of three primary steps: inventorying materials on hand, identifying what additional materials are needed, and then scheduling their production or purchase so that they arrive on time and in the right place so operations can proceed smoothly.
MRP software automates that process. It calculates the materials needed to meet production and customer demand using data from lead times, sales forecasts and production plans to determine the optimal stock levels. With MRP software, companies can easily view production requirements, stock on hand and purchasing or production needs, as well as historical purchasing and production data.
Many MRP software solutions include additional related processes, such as initiating purchase orders, managing warehousing and manufacturing, and managing suppliers. These broader systems are considered enterprise resource planning (ERP) solutions.
How does MRP software work?
An MRP system can be used in different manners depending on the type of business, its products and its fulfillment approach – make to order or make to stock. For manufacturing, MRP software almost always relies on a Bill of Materials (BOM) to determine the parts and components a business will need to purchase or manufacture to create a product.
Developed by product engineers, a BOM is the ultimate record of the materials, components and processes used to build a product. It gives manufacturers and inventory control experts a plan by which to begin gathering materials. It includes details such as part names and numbers, descriptions, quantities required and the order in which they will be needed.
MRP software compares resource requirements outlined in the BOM against stock on hand and determines the materials that will need to be purchased or produced to coordinate with the timeframe determined by the master production schedule (MPS).
It then calculates the ideal dates for acquisitions or production by analyzing demand forecasts and lead times. This information is then used by the purchasing or production departments to begin their roles in the materials fulfillment process.
Key functions of MRP software
Purchase planning
MRP software purchasing applications support the original mandate of material requirements planning – calculating material acquisitions needed to meet production plans and customer demand. Modern purchasing applications can also evaluate costs, track suppliers, automate purchase orders and create quality records, among many other capabilities.
Production scheduling
MRP software supports manufacturing production by ensuring materials needed are available closest to the time when the production schedule calls for them.
This minimizes carrying costs while maintaining efficiency and meeting demand and delivery deadlines.
Inventory control
Inventory management works in conjunction with production scheduling to track the location of materials, ensure there is enough on hand for production and facilitate getting that inventory where it needs to be at the right time. Inventory control applications can auto-allocate inventory, synchronize inventory across multiple locations and create automatic reorder points.
Real-time data and reporting
Since all business functions are interconnected within the ERP platform, information from different departments is consolidated and updated in real time. This gives management a comprehensive view of business performance, enabling better decision-making based on more accurate data.
Financial reports, inventory levels and production schedules can be accessed instantly, providing companies with insights that help them respond quickly to market changes or operational challenges.
Bill of Materials (BOM) management
ERP software incorporates the BOM into its material acquisition or production processes, using data from the BOM to ensure the right materials are available at the right quantities and in the correct order. The digital environment allows manufacturers to easily make changes to the BOM if needed and improves accuracy for complex products.
Benefits of MRP software for small manufacturers
There is a lot to consider for effective material requirements planning, especially at higher production volumes or for products that are more complex. MRP software systematically evaluates material requirements, production schedules, sales forecasts, customer orders and inventory to calculate the optimal supply of product inputs. That leads to real, measurable gains.
Improved production efficiency
Using a centralized database and integrations between production functions, such as purchasing and shop floor management, MRP software simplifies the process of ensuring that materials are where they need to be at the optimal time, so that production proceeds on schedule, in the correct sequence, with minimal interruptions.
Reduced costs
MRP software lowers purchasing costs by identifying the most cost-effective materials and components. It also reduces inventory carrying costs and waste through better alignment of production and demand, and helps manufacturers avoid overtime through more efficient scheduling and fewer bottlenecks.
Use QT9's Cost of Poor Quality (COPQ) calculator to estimate the savings better planning can unlock.
Optimized inventory
MRP software’s helps companies reach optimal inventory levels by using real-time and historical data to accurately forecast material needs. The software gives immediate insight into inventory locations and quantities, so you always know what’s on hand and what needs to be ordered or reordered. It can also automatically update inventory data when shipments arrive or leave the warehouse.
Reduced lead times
With the more accurate forecasting capabilities of MRP software, it becomes easier to schedule production for optimal efficiency, which keeps order-to-delivery times low and customers happy.
Traceability and compliance
Many manufacturers must keep detailed records of product materials. Some MRP systems enable easy traceability using barcoding for lot or serial number traceability, satisfying regulatory mandates and making it easier to track products in the event of a recall.
Improved customer satisfaction
Greater production efficiency means manufacturers are able to get their products to market more quickly, improving customer satisfaction and market position.
Cloud MRP software
Cloud MRP software is a material requirements planning solution delivered over the internet by a third-party provider, typically as part of a cloud ERP system. The benefits are numerous, since businesses are not responsible for maintaining the software on their own servers. That eliminates the need for staff and space to run it, and makes installing system updates simple.
Cloud-based software also lets businesses access their MRP data and production information from anywhere, at any time, as long as they have an internet connection. Additional advantages include:
- The ability to scale usage according to need
- Lower upfront costs, since delivery is usually subscription-based, so businesses only pay for what they use
- Anytime, anywhere access
- Vendor-provided maintenance, security and backup
MRP vs. ERP vs. MRP II
MRP is often considered a function of an ERP system, however ERP software grew from MRP software. Widespread use of MRP as a formalized business process came about in the late 1960s/early 1970s, and an extension of it, dubbed material resource planning (MRP II), was introduced in 1980. MRP II broadened the MRP scope to include related operations within an organization, such as product design, capacity planning and financial management.
In the 1990s, the analyst firm, Gartner, began using the term “enterprise resource planning (ERP)” to describe systems that combined MRP and MRP II with additional related processes from across a manufacturing “enterprise,” all of it managed in a centralized platform. When people talk about MRP software today, they are generally referring to ERP software.
When to invest in MRP software
If you’re experiencing any of the following, it may be time to switch to MRP software:
- Struggling to meet production deadlines
- Constantly putting out inventory management fires
- Spending hours on manual planning
- Relying on spreadsheets for inventory control
- Dealing with frequent miscommunications between sales, purchasing and production
Even if you're a small shop, adopting MRP software early can set the foundation for smoother growth and improved operations.
How much does MRP software cost?
Pricing for MRP software varies widely based on the delivery model and the size of your operation. For small manufacturers, cloud-based MRP typically ranges from roughly $50 to $500 per month, though pricing models differ in important ways.
Per-user pricing scales with your team size and can climb quickly as you add seats, while flat-rate subscriptions stay predictable regardless of headcount. Full enterprise ERP systems can start at $2,000 or more per month, and implementation costs range from nothing for self-service onboarding to five figures for complex deployments.
The right question isn't just what's the sticker price, but what's the total cost, including per-user fees, implementation and add-on modules. For a tailored estimate based on your operation, request a QT9 ERP quote.
Small manufacturers get the most out of QT9 ERP's MRP module
QT9 ERP is a robust enterprise resource planning software system that gives small manufacturers an intuitive and cost-effective operations solution. QT9's MRP module works for any industry, improving efficiency and accuracy through integrated data and automated operations.
With QT9 ERP, you get:
- Unlimited Bill of Materials
- Tailored customer support
- Customer, compliance, supplier and physical inventory web portals
- Lot and serial number inventory control and traceability
- Real-time data that supports better business intelligence
- Seamless integration with QT9 QMS
QT9 ERP offers a simple integration with QT9 QMS quality management software, giving users a unified platform for incorporating quality management into business processes, including nonconformance management, supplier and vendor management, document control and quality assurance. Our software lets you configure processes to fit your needs and is highly scalable, so you can implement at your own pace.
Reach out today for more information.
