I’ve been working with MRP systems for a long time. A long, long time.
Long enough that when I say things like AVL or talk about APICS certification, some people stare at me like I’m describing cave paintings. But the fundamentals of MRP haven’t changed — and the companies that get the most value out of it all tend to follow the same basic principles.
Before we get into the mechanics, let me set expectations.
My goal here isn’t just to answer questions about MRP. It’s to raise a few new ones. Ideally you’ll read some of this and think:
“Yeah, yeah, I know that.”
…and then hit a few moments where you go,
“Wait — I didn’t know that.”
Those are the good parts.
First, a Quick Reality Check About MRP
MRP only really tells you three things:
- What you need
- How much you need
- When you need it
That’s it.
If your system is doing those three things well, you’re in good shape.
If it isn’t, the problem is almost never the math.
MRP is basically a big, very fast calculator. It’s really good at remembering things and really good at math. What it’s notgood at is questioning the data you give it.
It will believe you completely.
Which brings us to the most important rule of MRP.
Garbage In, Garbage Out (Yes, Really)
I once visited a company that told me our MRP system didn’t work.
“Your MRP is a piece of junk,” they said.
“It doesn’t tell us the truth.”
After spending a day with them, I realized the system wasn’t the problem.
Everyone in the company had quietly added their own buffers:
- Sales set every order to ship immediately so theirs would get priority.
- Purchasing inflated lead times so they wouldn’t get blamed if something was late.
- Production added their own cushions in the schedule.
The result?
Everything was urgent.
Everything was late.
And the MRP output was completely useless.
Not because the math was wrong — because the inputs were.
The Three Things That Must Be Accurate
If you want MRP to work, three things have to be right.
According to the old APICS guidance (which I still like), the critical data elements are:
- Inventory accuracy
- Bills of material
- Lead times
Inventory and BOMs need to be nearly perfect. If those are wrong, parts will either appear when they shouldn’t — or worse, not appear when you actually need them.
Lead times matter too, but they’re a little more forgiving. If they’re off, the system will still show the demand — just not always on the right date.
But if your inventory or BOMs are wrong, the system may not show the requirement at all.
Another Surprise: MRP Doesn’t Actually Do Anything
This is something that surprises people.
MRP doesn’t automatically create purchase orders.
It doesn’t schedule jobs.
It doesn’t call your suppliers.
And honestly, you probably don’t want it to.
What it does is calculate the plan and show you what should happen.
That’s why buyers and planners still matter. Humans can look at the plan and say things like:
- “If I combine these orders I get a better price.”
- “That supplier ships on Tuesdays — I should move this.”
- “This order isn’t really urgent.”
MRP gives you the information. People still make the decisions.
The Best Way to Improve Your MRP
Here’s something I tell customers all the time:
Run MRP even if your data isn’t perfect.
You won’t break anything.
Instead, you’ll get a report that tells a story — and that story will highlight exactly where your data needs improvement.
For example:
- If MRP says you need to buy something you already have, your inventory is wrong.
- If it doesn’t show a requirement you know exists, your BOM is wrong.
- If everything shows up too early or too late, your lead times are wrong.
Each run helps you fix a little more data.
Over time, the plan gets cleaner.
Eventually you reach the point where people say:
“Yeah — we live and die by the MRP.”
That’s the goal.
One Last Thought
MRP works best when people treat it as a system for learning, not just a report for purchasing.
Run it regularly.
Question the output.
Fix the underlying data.
Do that consistently and something interesting happens:
The system starts telling the truth.
And when your MRP tells the truth, planning gets a whole lot easier.
An Interview with Ryan Sorensen, Vice President of Information Technology at Innovative Labs
Presented by Expandable Software – ERP for High-Tech and MedTech Manufacturers
A Familiar Debate with New Urgency
Across the manufacturing world, there’s always been a lively debate between engineering, manufacturing, and finance teams over whether a Manufacturing Execution System (MES) is truly necessary—or whether the embedded functionalities inside an ERP can get the job done.
At Innovative Labs, Vice President of Information Technology Ryan Sorensen has lived that debate firsthand. His perspective? “The truth is, MES and ERP aren’t competing systems—they’re complementary. ERP plans the work. MES proves it was done.”
For high-tech and medtech manufacturers, where compliance, traceability, and precision define success, that partnership between MES and ERP has become critical to digital transformation.
Defining MES vs ERP: The Nerve Centers of Modern Manufacturing
In a modern manufacturing environment, MES (Manufacturing Execution System) focuses on real-time production management on the factory floor, tracking raw materials to finished goods, while ERP (Enterprise Resource Planning) manages broader business processes such as finance, human resources, and supply chain management.
“Think of MES as the digital nervous system of your production line,” Sorensen explained, “and ERP as the central nervous system of your company.”
An MES executes production and provides real-time data that keeps ERP accurate and current. It’s that real-time connection, Sorensen said, that allows the enterprise to operate on facts instead of estimates.
Understanding the Need for MES
Sorensen described MES as “the missing link” between business plans and operational reality. “ERP will tell you what should be happening. MES tells you what actually is happening.”
- Among the many benefits derived from MES:
- A vital bridge between planning and execution – MES connects Sales & Operations Planning (S&OP), business planning, and financial reporting.
- Improved ERP accuracy – By capturing live shop-floor data (actual counts, scrap, downtime, and labor), MES ensures ERP operates on verified numbers.
- Enhanced inventory management – Real-time updates for lot quantities, expiration tracking, and location data ensure precise on-hand and available-to-promise visibility.
- Production scheduling support – ERP defines planned orders and capacity; MES translates them into executable jobs and feeds back actual start, stop, and completion times.
- Increased visibility – MES gives ERP users real-time production insights—status, equipment performance, WIP—reducing blind spots and delays.
- Accurate cost accounting – By recording true material usage, rework, and downtime, MES enables ERP to calculate standard versus actual costs and margins.
- Regulatory compliance – MES helps maintain 21 CFR Part 11 and ISO compliance by capturing electronic signatures and quality data, then pushing verified results to ERP.
- Improved financial and cost reporting – MES tracks real labor, yield, and waste metrics to give ERP the data needed for real-time cost reconciliation.
- “The KPIs don’t lie,” Sorensen said. “On-time delivery, yield, scrap reduction, labor efficiency, and inventory accuracy all show measurable improvement once MES and ERP are integrated.”
Integrating MES with ERP
When asked if MES should integrate with ERP, Sorensen’s answer was clear: “Absolutely. Integration is what turns data into insight.”
MES-ERP integration improves visibility across departments and enables unified dashboards. Finance can see production variances, logistics can view real-time inventory status, and quality can monitor batch performance—all from shared data.
Common integration points include production orders, inventory transactions, quality results, lot genealogy, material consumption, and WIP tracking.
Integration eliminates duplicate entry, synchronizes production and inventory data, and ensures that financial and operational systems reflect the same version of reality.
“When you automate order release and synchronize production and material availability instantly, ERP’s MRP engine can finally plan based on what’s actually happening,” Sorensen explained.
Two-way (bi-directional) integration offers the greatest benefit: ERP sends master data and work orders to MES, while MES returns real-time production feedback. The result is a closed feedback loop for scheduling, costing, and quality—supporting a connected, data-driven environment that fuels digital transformation.
Challenges of Integrating MES with ERP
- Sorensen was candid about the challenges. “The number one issue in MES-ERP integration is data quality. If your master data isn’t clean, your integration will just automate bad information faster.”
- Clean master data—accurate part numbers, BOMs, units, and routings—ensures smooth synchronization. Poor data quality leads to mismatched inventory and reporting discrepancies.
- Other common challenges include:
- Data mapping inconsistencies – Shared data must be formatted and defined consistently between systems.
- Unclear ownership of master data – Item Masters, BOMs, product costs, and vendor data must live in a single source of truth with a designated owner.
- Time granularity mismatches – Operations runs in minutes and hours; finance runs in weeks and months. Data synchronization must respect both.
- Lack of real-time synchronization – “If different departments are looking at different snapshots, you’ll get conflicting answers—and lose trust in the data,” Sorensen warned.
- Integration success requires both technical and organizational alignment.
Make or Buy?
When it comes to selecting an MES, Sorensen’s advice was simple: “Buy. People love to say, ‘We’re different.’ But most manufacturing operations face the same challenges.”
While some teams may advocate building their own system, homegrown software often ends up reinventing the wheel and introducing bugs or scalability issues that commercial vendors have already solved.
However, Sorensen emphasized that success depends on inclusive decision-making: “Involve operations, quality, and finance early. You may not get 100% of every wish list item, but achieving 80% with a stable, supported system is a win.”
Consensus, he said, is critical to long-term adoption and effectiveness.
Best Practices and Lessons Learned
- Sorensen shared several best practices drawn from his own experience:
- Clean data and robust processes – “If your processes aren’t sound, integration just makes bad data move faster. Define ownership and governance first.”
- Understand data sources and flows – Typically, work orders, BOMs, and item masters flow from ERP to MES; production completions, scrap counts, and quality results flow from MES to ERP.
- Phase the rollout – Start with critical modules like inventory, batch tracking, and production execution, then expand to quality, maintenance, and planning.
- Use standard integration technologies – REST or SOAP APIs, middleware (such as Dell Boomi or MuleSoft), message queues, or direct SQL synchronization.
- Build consensus – “Integration isn’t just IT—it’s a company-wide initiative. Everyone needs to buy into the same version of truth.”
The Takeaway
“MES isn’t replacing ERP—it’s completing it,” Sorensen concluded. “ERP plans. MES executes. Together, they form the backbone of a truly connected, data-driven factory.”
For small and midsize high-tech and medtech manufacturers, integrating MES and ERP is no longer optional—it’s a strategic imperative for operational visibility, accuracy, and agility.
About Expandable
From established enterprises that have grown with us from the pre-revenue phase to ground-breaking startups that need a dependable partner for their growth journey, Expandable is a leading provider of ERP solutions for highly regulated discrete and process manufacturing environments that demand audit trails, serial number and lot tracking, RMAs, kitting, and the like. Expandable’s customer base includes some of the most innovative high-tech and MedTech manufacturers worldwide. The platform unites every part of your operation—from product management and engineering, to production, quality, inventory, and after-sales service—into one affordable, fully integrated system.